Congress urges PM Modi to reverse proposed UPI transaction levy

The Central Government's decision to impose a levy on Unified Payments Interface (UPI) transactions above Rs 2,000 has drawn sharp criticism from the opposition Congress party, which has demanded the measure be scrapped.

Under the new regulation effective from October 15, a 0.4 percent charge will be applicable to digital payments exceeding the Rs 2,000 threshold. Unlike direct taxation on consumers, the levy is to be borne by merchants, retailers, and businesses facilitating such transactions through UPI platforms.

Congress has mounted a campaign against the proposed tax, framing it as detrimental to India's digital payment ecosystem and small traders who rely on cashless transactions. The party has called on Prime Minister Narendra Modi to demonstrate political resolve by reversing the decision.

The announcement comes at a time when digital payments have become increasingly mainstream across India, with UPI facilitating millions of daily transactions. The government has positioned the levy as a measure to regulate the digital payments sector, though critics argue it may discourage the adoption of cashless transaction methods, particularly among smaller merchants and in rural markets.

The proposal is set to take effect within weeks, though the controversy surrounding it continues to escalate with political parties and industry stakeholders weighing in on the contentious issue.