The Congress on Thursday rejected claims that its MPs who were part of the Parliament Standing Committee on Finance had supported the decision to levy a fee on high-value UPI payments, and said the Modi government was making "pathetic" attempts to divert attention from the "gigantic backlash" generated after the "UPI tax" decision.
The opposition party's assertion came after the government questioned the rationale behind Congress leader Rahul Gandhi's criticism of the decision to levy a fee on UPI payments to merchants above Rs 2,000, saying a parliamentary standing committee had backed such a move and Congress members in the panel had supported it.
A senior government functionary said the Parliamentary Standing Committee on Finance had pressed for a tiered Merchant Discount Rate (MDR)/revenue framework for Unified Payments Interface (UPI) and noted that it should be notified and operationalised without delay.
Five Congress MPs, including 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.
Dismissing the claims, Gogoi said the Parliament Standing Committee on Finance did not discuss the UPI tax proposal that the Modi government announced 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.
Questions were raised on the need for MDR, but the government representatives did not have any specific or satisfactory answers at that point, Gogoi said.
"I reiterate that the recent UPI tax policies hurt the small Indian merchants, vendors, entrepreneurs and help the major American corporations. Stop surrendering, PM Modi," Gogoi said on X.
Tagging Gogoi's post, Congress general secretary in charge of communications, Jairam Ramesh, said, "The news plantation economy which has thrived in the Modi regime stands exposed. Glad you rebutted.
In another post, Ramesh said these are "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 hit out at the government.
"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 even on the principle or conceptual basis of MDR as Gogoi points out, concerns were raised by the members with regard to its need, efficacy, etc., over the course of various sittings of the committee, Tewari said.
"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 leader of the opposition in Lok Sabha also demanded a rollback of the government's decision to levy a fee on UPI payments.
According to the report of the standing committee headed by BJP MP Bhartruhari Mahtab, the panel noted its earlier recommendation emphasising that due to the imperative of a viable revenue model, legislative-enabling provisions for a tiered MDR structure have been brought forward.
However, the committee remained deeply concerned by the staggering mismatch between the Rs 2,000-crore allocation and the industry's estimated operational cost of Rs 20,700 crore.
In the view of the committee, while statutory enablement now exists to permit calibrated MDR on high-value transactions, any delay in notifying and operationalising this framework leaves payment service providers heavily dependent on inadequate subsidies, thereby threatening 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 (person-to-merchant), the committee, in its report, 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 multi-year scheme and cashback components are 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.
