GST & Tax
UPI MDR & GST Calculator
The 0.4% UPI MDR, 18% GST on it, and your net settlement — from 15 October 2026.
Rates last verified 2026-09-21 — always confirm against the current notification before filing.
This is provisional, not a final notification
The 0.4% MDR structure itself is confirmed via NPCI's 15 September 2026 circular, effective 15 October 2026. The 18% GST and input tax credit treatment calculated here is based on CBIC official statements reported in the press, not yet a standalone GST Council notification as of this writing. Recheck this after the 57th GST Council meeting (7 October 2026) and against your bank's own notice before relying on it for a filing decision.
How this is worked out
Enter what the customer actually pays. If it's a P2P transfer, or ₹2,000 or below, or you're a small P2PM merchant under ₹1 lakh a month, there's no MDR at all. Otherwise, the calculator applies your merchant category's rate — 0.4% for a standard merchant (capped at ₹300), a flat ₹5 for railways/telecom/insurance/fuel, or 0.02% for capital markets (also capped at ₹300) — then adds 18% GST on that MDR amount, not on the payment itself. What's left after both deductions is what actually lands in the merchant's bank account.
The input tax credit line only applies if the merchant is GST-registered and making taxable outward supplies — an unregistered merchant, one on the Composition Scheme, or one dealing in exempt supplies pays the same GST but has no mechanism to claim it back, so it becomes a flat cost instead of a recoverable one.
Worked example
A ₹10,000 UPI payment to a standard, GST-registered merchant: MDR is 0.4% × ₹10,000 = ₹40, GST on that is 18% × ₹40 = ₹7.20, so ₹47.20 is deducted from settlement and the merchant receives ₹9,952.80. Since the merchant is GST-registered and makes taxable supplies, the ₹7.20 is claimable as input tax credit — an unregistered merchant would keep the same ₹9,952.80 net settlement but couldn't claim that ₹7.20 back.
Related reading
For the full breakdown of who pays the MDR, what stays free, and the sector-specific exceptions, see MDR on UPI Is Back: The New 0.4% Charge From 15 October 2026, Explained. For the GST and input tax credit mechanics in depth — including the gap where a merchant crosses the UPI small-merchant threshold without crossing the GST registration threshold — see GST on UPI MDR: 18% Tax + ITC Rules From 15 October 2026.
Frequently asked questions
Does the customer pay any of this?
No — the MDR and the GST on it are both charged to the merchant, deducted from what the bank settles into their account. The customer pays exactly the listed price, and merchants aren't permitted to pass this charge on separately.
Why does the small P2PM merchant option ask for my monthly total, not just this payment?
The ₹1 lakh/month exemption is tested on your total UPI QR receipts for the month, not on any single transaction. A payment can be large and still fall inside the exemption if your month-to-date total, including it, stays at or under ₹1 lakh.
I'm not sure if I can claim the input tax credit — what decides it?
You generally can if you're GST-registered and the sale this MDR relates to is a taxable supply, subject to the usual Section 16 conditions (a proper tax invoice from your bank/aggregator, the tax actually reaching the government, and it showing up matched in your GSTR-2B). You generally can't if you're unregistered, on the Composition Scheme, or dealing in exempt/nil-rated supplies.
Is this calculator using confirmed, final figures?
The MDR rates and thresholds are confirmed via NPCI's circular. The GST/ITC treatment follows from applying the existing 18% rate on payment-processing services to this new fee, based on official statements reported in the press rather than a dedicated notification as of this writing — recheck after the 57th GST Council meeting on 7 October 2026, just before the 15 October rollout.
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