India's Supreme Court declined on 28 September 2026 to grant an interim stay on the merchant discount rate that will apply to UPI person-to-merchant transactions above Rs 2,000 from 15 October. A bench of Chief Justice Surya Kant and Justices Joymalya Bagchi and V Mohana issued notice on the petition and allowed four weeks for counter-affidavits. The petition names the Union government, the Reserve Bank of India, the National Payments Corporation of India and the UPI and Services Steering Committee as respondents.
Advocate Anjan Datta filed the case as a public interest petition. It challenges the government's notification of 14 September and the MDR framework announced on 15 September. It asks the court to quash both and to declare that no such compulsory charge may be imposed on the strength of a press release or FAQs without a published statutory instrument.
Justice Bagchi asked whether the charge is a tax or a fee and, if it is not a fee, what the executive basis for it is. Additional Solicitor General N Venkataraman, for the government, told the court it was not taking a single rupee of the charges, which he described as a settlement fee between payment aggregators and banks. He said the charges take effect only on 15 October.
The framework, set out in a finance ministry release of 15 September, puts the rate at 0.4 percent on person-to-merchant transactions above Rs 2,000, capped at Rs 300 per transaction from Rs 75,000 upwards. Sectors including railways, telecommunications, insurance, fuel and agricultural inputs pay a flat Rs 5 per transaction above Rs 2,000. The release states that MDR is neither a tax nor a charge collected by the government or NPCI, and that about 96 percent of merchant transactions are unaffected.
The four weeks allowed for counter-affidavits end after the charge starts on 15 October. Reports of the hearing give no date for the next listing.