Hyderabad, Aug. 5 -- The government is likely to allow banks and payment service providers to levy a charge of 0.25 to 0.4 per cent as merchant discount rate (MDR) on UPI payments above Rs 2,000 made to businesses, while keeping person-to-person transactions out of its scope, officials said.

The Taxation and Other Laws (Amendment) Bill, moved by Union Finance Minister Nirmala Sitharaman in Parliament on Tuesday, August 4, seeks to remove the existing bar on banks and payment service providers from levying MDR on notified electronic payment modes. Officials, however, told the Times of India that no decision has been taken on when the proposal will be implemented.

Won't affect daily small purchases

Official estimates show that the Rs 2,0...