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If neither tax nor fee, what is this ‘expropriation’, Supreme Court asks Govt…

The Supreme Court on Monday (September 28, 2026) refused a plea for an interim stay of a decision by the government to levy 0.4% charge on merchants for specified UPI person-to-merchant transactions in excess of ₹2,000.

A three-judge Bench headed by Chief Justice of

A three-judge Bench headed by Chief Justice of India Surya Kant issued notice to the Union of India and directed the filing of counter affidavits within four weeks. The National Payments Corporation of India (NPCI) had introduced the merchant discount rate (MDR) of 0.4% on UPI payments from October 15.

During the brief hearing, Justice Joymalya Bagchi asked

During the brief hearing, Justice Joymalya Bagchi asked Additional Solicitor General N. Venkataraman what exactly was the nature of the MDR. “It is neither a tax nor a fee... So what is the exigency of making this expropriation?” Justice Bagchi asked.

The petition was filed by advocate Anjan Datta

The petition was filed by advocate Anjan Datta, challenging the Centre’s September 14 notification and the MDR framework announced on September 15.

According to the government, an MDR of 0.4%

According to the government, an MDR of 0.4% would be introduced on Person-to-Merchant (P2M) UPI transactions above ₹ 2,000. For transactions of ₹75,000 and above, the MDR would be capped at ₹300 per transaction.

The plea challenged the constitutional validity of the

The plea challenged the constitutional validity of the amended Section 10A of the Payment and Settlement Systems Act, 2007, alleging that it gave unguided powers to the Executive to decide which electronic payment modes would receive the no-charge protection. In this context, the petitioner pointed out that the no-charge protection for RuPay debit cards would continue without a monetary ceiling.

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If neither tax nor fee, what is this ‘expropriation’, Supreme Court asks Govt on UPI MDR charges

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Source: The Hindu

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