Plea in Supreme Court challenges Centre's decision to levy MDR on merchant UPI transactions over ₹2,000

A Public Interest Litigation (PIL) has been filed before the Supreme Court challenging the Central government's decision to withdraw the statutory zero-Merchant Discount Rate (MDR) protection for Unified Payments Interface (UPI) transactions exceeding ₹2,000 [Anjan Datta v. Union of India]. .The petition assails the proposed MDR framework scheduled to take effect from October 15, 2026. It highlights that while UPI payments above ₹2,000 have been exposed to levies, identical "no-charge" protection continues to be extended to RuPay-powered debit cards without any monetary ceiling. .While clarifying that the challenge is not to maintaining secure payment infrastructure, the plea assails the creation of a nationwide compulsory payment burden without disclosing cost studies, underlying methodology, or enforceable anti-pass-through safeguards.Under the announced framework, person-to-person (P2P) transfers and person-to-merchant (P2M) payments up to ₹2,000 remain free. However, a 0.4% MDR applies to P2M payments above ₹2,000, with transactions of ₹75,000 and above capped at ₹300. Specified essential sectors attract a flat ₹5 charge, capital-market payments carry a 0.02% levy and merchants receiving up to ₹1 lakh per month remain exempt.The petition argues that despite official assertions that merchants cannot pass these costs to consumers, the fee on qualifying receipts will inevitably enter price structures, reduce working capital, or induce refusal of UPI payments and transaction-splitting among low-margin traders."A bare direction against an expressly recognised economic consequence does not eliminate the burden," the plea asserts..The PIL, filed by Advocate Anjan Datta, further contends that thresholds like the ₹2,000 transaction mark and ₹1 lakh monthly receipt ceiling are unsupported by disclosed data. A transaction of ₹2,001 attracts a percentage fee while ₹2,000 does not, creating financial "cliffs" that distort market behaviour and discriminate between similarly situated merchants while favouring very high-value transactions via the cap, it says.Assailing the multi-tiered levy as manifestly arbitrary and violative of Articles 14 and 19(1)(g) of the Constitution, the petitioner argues that fixing financial charges via press releases rather than notified statutory rules suffers from excessive delegation of essential fiscal functions to an unincorporated steering committee..The plea also raises a threshold vires issue, stating that a nationwide compulsory MDR cannot rest merely on press releases or FAQs. The petitioner has sought the production of complete official records, quashing of the framework imposing MDR above ₹2,000 or, alternatively, a transparent re-consultation process based on empirical impact assessments and independent review by the Reserve Bank of India (RBI).