A writ petition has been filed before the Supreme Court seeking quashing of Gazette notifications issued by the Union Ministry of Finance on September 14 and 15, announcing charges on commercial UPI transactions above ₹2,000.

The petition has been filed by Advocate Anjan Datta, who has challenged the notifications on the ground that the newly introduced charges would ultimately affect the common citizen.

The plea has been filed against the Union government, the Reserve Bank of India (RBI), the National Payments Corporation of India (NPCI) and the UPI & Services Steering Committee.

The petitioner contends that the imposition of charges on commercial UPI transactions could have a wider impact on the public, as businesses may pass on the additional costs to consumers.

The Union Government has introduced a framework permitting Merchant Discount Rate (MDR) charges on specified high-value commercial UPI transactions, while retaining free UPI payments for individuals and small merchants. The move follows amendments to the Payment and Settlement Systems Act, 2007, and notifications issued by the Ministry of Finance in September 2026.

The Finance Ministry's September 14 notification, issued under Section 10A of the Payment and Settlement Systems Act, specifies RuPay debit card payments and UPI transactions up to ₹2,000 as electronic modes on which banks and system providers cannot impose direct or indirect charges on persons making or receiving payments. The notification therefore protects transactions up to the specified threshold, rather than imposing a charge on every UPI payment.

The government subsequently clarified that the new framework would preserve free person-to-person (P2P) transactions irrespective of the amount transferred. It also stated that payments to merchants up to ₹2,000 and transactions covered by the zero-MDR framework for small merchants would remain free.

Merchant Discount Rate is a fee associated with processing a merchant payment. It is collected within the payment ecosystem and distributed among participating entities, such as banks and payment service providers. It is not a tax collected by the Government or NPCI.

Under the announced framework, the MDR will apply to specified person-to-merchant (P2M) UPI transactions above ₹2,000. The standard rate is 0.4%, with a maximum charge of ₹300 for transactions of ₹75,000 or more. Certain essential and thin-margin sectors, including railways, telecommunications, insurance, fuel and agricultural inputs, will attract a flat MDR of ₹5 for transactions above ₹2,000. Capital market transactions will attract a lower rate of 0.02%, capped at ₹300.

The announced framework places the MDR within the merchant payment ecosystem. The Finance Ministry has advised banks to ensure that merchants do not pass the charge on to consumers. UPI application providers have also been prohibited from imposing platform fees or hidden charges on users under the framework.

The government has said that approximately 96% of merchant transactions will remain unaffected, either because they fall below ₹2,000 or are covered by zero-MDR provisions for small merchants. Small merchants receiving up to ₹1 lakh per month through UPI QR codes under the P2PM category will continue to enjoy zero MDR.

Case : Anjan Datta v. Union of India | WP(c) Diary No. 57387/2026