Traders said the move could impact high-value retail sector
“Although there is a cap of Rs 300 for transactions over Rs 75,000, the gold-jewellery industry predominantly deals in high-value transactions. President of Ernakulam Broadway Merchants Association Zaheer P A said nearly 70% of the 1,000 establishments in Broadway handle single transactions worth over Rs 2,000. Kerala State Petroleum Traders Association said it has not taken a final decision on not allowing UPI payments above Rs 2,000.
State general secretary of Kerala Gold and Silver Merchants Association (KGSMA) S Abdul Nazar said this could impact high-value retail sectors. For a jewellery establishment handling numerous UPI transactions each day, the cumulative MDR costs incurred on each transaction will translate into a significant additional operational expense by the end of the month,” he said. Nazar said that authorities clarified merchants cannot collect MDR from customers and businesses will bear this financial load. “Traders will have to bear the cost and will be forced to hike the price of commodities to cover it to continue running the business,” he said, adding that the regional chambers of commerce will meet in the coming days to decide on a unified strategy. Small traders said they adopted UPI only after considerable difficulty and that digital payments improved accountability. State vice-president of Kerala Vyapari Vyavasayi Ekopana Samiti Danish Chandran said the association will launch a protest. “Petroleum traders legal and welfare society in Kochi will hold a convention on Monday to discuss the issue and submit a memorandum to the CM seeking steps to cancel Centre’s plan to charge MDR,” said association president M M Basheer.
KGSMA urged authorities to grant a special exemption or waive MDR for high-value gold purchases, arguing that high-value transactions should not be treated like routine retail purchases. General retail hubs shared similar concerns. With the entire trading process – including payments from customers to retailers and from retailers to wholesalers – now largely cashless, they say the proposed tax would impose an additional burden. Traders and merchants in Kozhikode opposed the proposed fee, saying the move would put an additional burden on small traders who are struggling amid growing competition from large corporate retailers and the shift towards online shopping.