Supreme Court defers UPI MDR stay decision, demands Centre clarification

The Supreme Court has declined to grant an immediate interim stay on the Merchant Discount Rate (MDR) for UPI transactions while pressing the government for clarification on the charge's constitutional validity. Justice Bagchi, during hearing, raised pointed questions about whether the levy should be classified as a tax, a fee, or neither, and demanded the Centre explain its legal basis for implementation. The bench also sought specifics about the nature of service for which the payment was being collected, signalling concerns about the charge's fundamental justification. Rather than issue an emergency stay, the court opted to call for a substantive government response, indicating it intends to conduct a thorough examination of the matter's legal and constitutional dimensions. The postponement of interim relief reflects the Supreme Court's cautious approach, suggesting the full implications of the UPI MDR charge require careful judicial scrutiny before any stay is imposed.