'Cover Machines With Black Cloth': Delhi Traders Call for 'No UPI' Day Today Against Proposed MDR Levy Above Rs 2,000

Several Delhi traders are expected to observe a “no UPI” day on October 2 as a protest against the proposed Merchant Discount Rate (MDR) on certain UPI transactions. While the Confederation of All India Traders (CAIT), led by BJP MP Praveen Khandelwal, has said it has not given any such call, the Chamber of Trade and Industry (CTI), Delhi, has announced that it will observe the "no UPI" on Friday.

The CAIT has mentioned that it has not taken any decision or passed any resolution to observe October 2, as it is no UPI day. The traders' body claimed there has been no official announcement from the organisation regarding such an observance.

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Even as there’s no official declaration, traders have not withdrawn the ‘No UPI Day’ call. Around 100 trade organisations would extend support to the campaign. The observance is expected to take place in at least 2000 locations across the country.

What does the CTI say?

The CTI has appealed to shopkeepers and traders to cover their UPI machines with a black cloth on October 2 and accept only cash payments for the day. The Delhi Vyapar Mahasangh also supported the "No UPI Day". Mahasangh President Devraj Baweja stated that the levy is not in the best interest of merchants, adding that the MDR could lead to a 50 per cent decline in UPI transactions.

In a statement, Babulal Gupta, National President of the Bharatiya Udyog Vyapar Mandal (BUVM), criticised the MDR as anti-business and urged the Finance Minister to immediately withdraw the decision. BUVM National General Secretary Hemant Gupta added that affiliated traders will observe "No UPI Day" on October 2 as a symbolic protest.

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The merchant organisation has urged Union Finance Minister Nirmala Sitharaman to withdraw the proposed MDR on UPI payments above Rs 2,000.

According to CTI, the proposed charges would further place a burden on around 6000 shopkeepers and traders.
The organisation also claimed if MDR is imposed on UPI payments above Rs 2,000 from October 15, UPI transactions could fall by 50 per cent. The organisation stated that the move can also increase cash circulation.

What does the new UPI framework say?

The new UPI framework said that a 0.4 per cent MDR would apply to specified merchant UPI payments above Rs 2,000 from October 15. Person-to-person transfers and payments below Rs 2,000 would not be covered in the MDR. The MDR will be restricted at Rs 300 for payments of Rs 75,000 and above.

Essential and thin-margin sectors, including railways, telecom, insurance, fuel and agricultural inputs, will pay a flat MDR of Rs 5 per transaction for payments above Rs 2,000.

What does the PIL say?

As the row intensified, a public interest litigation has been filed by advocate Anjan Datta, challenging the government's September 14 notification and the MDR framework announced on September 15.

The plea alleges that the levy was introduced without adhering to the adequate statutory safeguards, transparency or public consultation. It sought the quashing or suspension of the framework for UPI transactions above Rs 2,000.

Additionally, the plea has sought a fresh review after transparent consultation, publication of empirical data and an impact assessment, along with safeguards for micro and small enterprises.