Advocate files petition in SC challenging UPI charge levy:Petitioner says ‘Newly announced charges will ultimately impact common man’

A plea has been filed in the Supreme Court seeking quashing of Gazette notifications issued by the Union Ministry of Finance on September 14 and 15 that announced charges on commercial UPI transactions above ₹2,000, said ANI. The plea has been filed by advocate Anjan Datta on the ground that the newly announced charges would ultimately affect the common citizen. The plea has been filed against the Union government, the RBI, the National Payments Corporation of India (NPCI), UPI. The National Payments Corporation of India (NPCI) and the Ministry of Finance have issued detailed clarifications regarding the revised Merchant Discount Rate (MDR) framework for UPI transactions. Starting 15th October 2026, new payment rules are coming into place. No charges on UPI person-to-person transactions:0.4% charges will apply to person-to-merchant payments above ₹2,000 UPI payments will remain free for individuals, with no charges on person-to-person (P2P) transactions regardless of the amount transferred. The revised UPI Merchant Discount Rate (MDR) framework will apply only to specified person-to-merchant (P2M) transactions above ₹2,000. The framework, introduced under the Payment and Settlement Systems Act, 2007, will come into effect from 15 October 2026. According to the government, around 96% of all merchant transactions will remain unaffected. All P2M transactions up to ₹2,000 will continue to be free of MDR, while small merchants, including street vendors and neighbourhood shops, receiving up to ₹1 lakh per month through UPI QR codes will also continue to pay zero MDR. For specified merchant transactions above ₹2,000, MDR will generally be charged at 0.4%. The charge will be capped at ₹300 for transactions of ₹75,000 and above. Transactions above ₹2,000 in essential and thin-margin sectors such as railways, telecommunications, insurance, fuel and agricultural inputs will attract a flat MDR of ₹5. Capital market transactions, including mutual funds and securities, will have an MDR of 0.02%, capped at ₹300. The government clarified that MDR is not a tax or a charge collected by the government or NPCI. It is distributed among banks, payment service providers and UPI application providers to support the ecosystem. Customers will not be required to pay MDR, and banks have been advised to prevent merchants from passing the cost on to them.