Bill proposes UPI MDR return, while extending electronics manufacturing tax relief
A bill tabled in Lok Sabha proposes removing the zero-MDR provision for UPI, potentially adding payment-acceptance costs for merchants. It also outlines long-duration tax relief for electronics contract manufacturing, bonded-warehouse components and other investment-linked activities.
What happened
The Taxation and Other Laws Amendment Bill proposes allowing merchant discount rates on UPI by removing zero-MDR restrictions, potentially reshaping payment
Key facts
- Merchant discount rates proposed on UPI transactions
- Section 10A zero-MDR provision proposed to be scrapped
- Tax exemption for electronics contract manufacturing proposed until FY41
- Tax relief for bonded-warehouse electronic components proposed until FY41
- Rough diamond sales tax exemption proposed until 31 March 2041
- SPV surcharge proposed to increase from 10% to 25%
Why this matters
Prioritize partnership or acquisition targets in payments infrastructure and electronics supply chains where a potential MDR reset and extended manufacturing incentives could improve strategic returns.