UPI Fee Row: Congress Denies Its MPs Backed Charges Above Rs 2,000, Cites Finance Panel Record

The Congress on Thursday rejected the government's claim that its MPs on the Parliamentary Standing Committee on Finance had supported the decision to levy a fee on high-value UPI payments, saying the panel had not discussed the recently announced measure.

The exchange followed the government's questioning of Congress leader Rahul Gandhi's criticism of the decision to levy a fee on UPI payments to merchants above Rs 2,000. A senior government functionary cited the finance committee's recommendation for a tiered Merchant Discount Rate (MDR) and revenue framework for UPI, while Congress MPs Gaurav Gogoi and Manish Tewari said the panel had not considered the specific fee announced by the government.

According to PTI, the government said the Parliamentary Standing Committee on Finance had pressed for a tiered MDR/revenue framework for Unified Payments Interface (UPI) and had noted that it should be notified and operationalised without delay.

Five Congress MPs — P Chidambaram, Manish Tewari, Gaurav Gogoi, Kishori Lal and K Gopinath — were present on August 12 when the report was adopted, with no dissent recorded in the published minutes, the BJP functionary said.

Gogoi, however, said the finance committee had not discussed the UPI tax proposal announced by the Modi government recently.

"The Department of Finance did not have any specific proposal on “UPI tax” when they met the members of the finance committee," Gogoi said.

He said questions had been raised over the need for MDR, but government representatives did not have any specific or satisfactory answers at that point.

“I reiterate that the recent UPI tax policies hurt the small Indian merchants, vendors, entrepreneurs and help the major American corporations. Roll back UPI tax. Stop surrendering, PM Modi,” Gogoi said on X.

Congress general secretary in charge of communications Jairam Ramesh, while tagging Gogoi's post, said, “The news plantation economy which has thrived in the Modi regime stands exposed. Glad you rebutted.”

In another post, Ramesh said these were “pathetic” attempts being made by the Modi government to divert attention from the “gigantic backlash” generated after the “UPI tax” decision taken to “appease US companies and Donaldbhai”.

Congress MP Manish Tewari also criticised the government's use of the committee proceedings.

“Unfortunately, proceedings of parliamentary standing committees that are supposed to be privileged are now sought to be used by the government to score brownie points,” Tewari said on X.

“My colleague Gaurav Gogoi is correct – no specific proposal qua the recent Merchant Discount Rate to be levied on UPI transactions from October 15, 2026, was ever brought before the Parliamentary Standing Committee on Finance – rate, quantam, amount of fee to be charged, ceiling and exemption slabs, etc.,” he said.

Tewari said that even on the principle or conceptual basis of MDR, members had raised concerns over its need and efficacy during various sittings of the committee.

“To claim that a particular measure was supported by 'certain members' of the committee is an inaccurate and fallacious characterisation of the confidential proceedings of a Parliamentary Committee," the Congress MP said.

The government's response followed Rahul Gandhi's opposition to the decision to levy a fee on UPI payments above Rs 2,000 to merchants. The Leader of Opposition in the Lok Sabha alleged that Prime Minister Narendra Modi had decided to “prostrate” before US President Donald Trump and give a huge amount of money to America.

Gandhi also demanded a rollback of the government's decision to levy a fee on UPI payments.

A senior government functionary questioned the rationale behind Gandhi's criticism and said, “Why is Rahul Gandhi opposing something his own MPs, including former finance minister P Chidambaram and former minister in the UPA government Manish Tewari, supported within the parliamentary panel?”

According to PTI, the standing committee was headed by BJP MP Bhartruhari Mahtab. The panel noted its earlier recommendation that, given the imperative of a viable revenue model, legislative-enabling provisions for a tiered MDR structure had been brought forward.

The committee also expressed concern over the mismatch between the Rs 2,000-crore allocation and the industry's estimated operational cost of Rs 20,700 crore.

It said that while statutory enablement now existed to permit calibrated MDR on high-value transactions, any delay in notifying and operationalising the framework would leave payment service providers heavily dependent on inadequate subsidies. The committee said this could threaten critical investments in cybersecurity, fraud prevention and network infrastructure.

On the incentive scheme for promotion of RuPay debit cards and low-value BHIM-UPI transactions involving person-to-merchant payments, the committee observed and recommended:

“The Committee notes the massive Rs 2000 crore budgetary allocation for 2026-27 designed to offset ecosystem costs caused by the zero-MDR policy on RuPay and low-value UPI transactions.

“The Committee observes that while UPI is expected to process up to 150 billion transactions per month and add 600 million new users, the current government incentive covers merely 11 per cent of the industry's actual costs and 14 per cent of potential MDR collections, creating a structural funding gap impacting long-term infrastructural investment.”

The committee recommended that while the proposed three-year scheme and cashback components were necessary to democratise digital payments in untapped Tier 3-6 cities, the Department of Financial Services must concurrently explore a self-reliant, tiered revenue model.

Congress MPs have maintained that the committee's recommendation for a tiered MDR framework did not amount to support for the specific UPI fee announced for transactions above Rs 2,000. They said no proposal setting out the rate, amount of fee, ceiling or exemption slabs for the October 15, 2026 measure was brought before the committee.