UPSC CSE Current Affairs — 26 September 2026

The government has confirmed it will not extend the October 15 deadline for reintroducing Merchant Discount Rate on select UPI transactions. MDR, a fee charged on digital payment processing, was waived for UPI in 2020. Its selective reintroduction marks a significant policy shift for India's digital payments ecosystem. Separately, the GST Council is expected to review whether the 18% GST currently applicable to MDR charges should be revised, adding a second layer of uncertainty for merchants and payment aggregators.

MDR is the fee that a merchant's bank charges for processing a digital payment. It is split among the acquiring bank, the issuing bank, and the payment network. In January 2020, the government waived MDR on UPI and RuPay debit card transactions to accelerate digital payment adoption, compensating banks through a separate government incentive scheme.

Reintroducing MDR on select UPI transactions reverses that approach. The government now appears to signal that the payment infrastructure has matured enough to be commercially self-sustaining. However, MDR reintroduction carries two cost layers for merchants: the MDR itself, and 18% GST on that fee, since payment processing services attract GST under the standard rate for financial services.

The GST Council's potential review matters because even a small MDR — say 0.3% — becomes meaningfully more expensive when GST is added on top of it. For small merchants and kirana stores, this could discourage UPI acceptance.

From a monetary policy and credit transmission angle, higher merchant costs can push informal transactions back to cash, reducing data trails that banks use for credit assessment — directly affecting financial inclusion metrics that RBI tracks through the Financial Inclusion Index. For UPSC, the intersection of fiscal policy (GST rate), payment regulation (RBI's oversight of payment systems), and digital public infrastructure makes this a high-value concept.

The Supreme Court upheld a High Court judgment holding that offering a 'dua' (prayer) seeking God's blessings for electoral victory does not amount to soliciting votes on the ground of religion under Section 123(3) of the Representation of the People Act, 1951. The Court distinguished between a personal religious expression and a corrupt practice of appealing to voters on religious grounds, reinforcing that intent and direct appeal to voters are essential ingredients of the corrupt practice provision.

Section 123(3) of the Representation of the People Act, 1951 defines a 'corrupt practice' as an appeal by a candidate or their agent to vote or refrain from voting on the ground of religion, race, caste, community, or language. The Supreme Court's ruling draws a critical line between two very different acts: a private or public prayer invoking divine blessing for a candidate's success, and a direct appeal to voters asking them to vote on religious grounds.

The distinction matters constitutionally. Article 19(1)(a) protects freedom of speech and expression, and Article 25 protects freedom of religion. A candidate uttering a prayer is exercising both rights. However, Section 123(3) curtails this freedom when the religious expression is instrumentalised as a tool to solicit votes — i.e., when the religious act is directed at the electorate with the purpose of influencing their vote on religious grounds.

The Court's reasoning follows the test laid down in Abhiram Singh v. C.D. Commachen (2017), where a seven-judge constitutional bench held that 'his' in Section 123(3) refers not just to the candidate's religion but to anyone's religion — making any religious appeal in election campaigning a corrupt practice. However, that ruling also implicitly required a direct nexus between the religious appeal and the solicitation of votes. A dua, offered as a spiritual expression rather than a voter-directed campaign tool, lacks that nexus. Thus, the two essential ingredients — a direct appeal and an intent to solicit votes on religious grounds — were absent, and the corrupt practice charge could not sustain.

The Supreme Court has reserved its judgment on a plea filed by the Sambhal Mosque Management Committee challenging a trial court's order directing a survey of the Shahi Jama Masjid in Sambhal, Uttar Pradesh. The mosque committee argued that the survey order was passed ex parte, without giving them an opportunity to be heard, violating natural justice. The case raises critical questions about the Places of Worship (Special Provisions) Act, 1991 and due process rights under Article 21.

This case sits at the intersection of three constitutional and statutory layers that CLAT PG and UPSC CSE examiners frequently test.

**First, the Places of Worship (Special Provisions) Act, 1991.** This Act freezes the religious character of all places of worship as they existed on August 15, 1947, and bars courts from entertaining suits seeking to convert the character of any place of worship. The sole exception is the Ram Janmabhoomi-Babri Masjid dispute, which was explicitly carved out. The Sambhal case tests whether a court-ordered survey to 'ascertain' the original character of a mosque is itself a proceeding barred by this Act — because it effectively entertains the very inquiry the Act prohibits.

**Second, natural justice under Article 21.** The Supreme Court has consistently held, from Maneka Gandhi v. Union of India (1978) onwards, that any procedure affecting a person's rights must be fair, just, and reasonable. An ex parte survey order affecting a mosque's legal status without hearing the mosque committee arguably violates the audi alteram partem principle — a core component of procedural due process.

**Third, the Order VII Rule 11 CPC angle.** The mosque committee likely argued that the underlying suit itself was not maintainable under the 1991 Act and should have been rejected at the threshold before any survey was ordered.

The SC's reserved judgment will clarify how far trial courts can go in ordering religious-site surveys, and whether the 1991 Act creates an absolute bar or merely a procedural one.

Tax professionals and industry bodies have urged the CBDT to extend the September 30, 2025 deadline for filing tax audit reports under Section 44AB of the Income Tax Act for Assessment Year 2026-27 to October 31. The request cites portal glitches, compressed timelines, and heavy workload. As of now, CBDT has not announced any extension. Taxpayers failing to meet the deadline face a penalty of 0.5% of turnover or ₹1.5 lakh, whichever is lower.

A tax audit under Section 44AB of the Income Tax Act, 1961 is mandatory when a business's turnover exceeds ₹1 crore (or ₹10 crore if cash transactions are below 5% of total) or a professional's gross receipts exceed ₹50 lakh in a financial year. The audit must be conducted by a Chartered Accountant, who submits Form 3CA/3CB and Form 3CD.

The deadline for filing the tax audit report is typically September 30 of the Assessment Year. CBDT (Central Board of Direct Taxes), under the Ministry of Finance, has statutory authority to extend this deadline via a circular under Section 119 of the Income Tax Act.

Missing the deadline triggers a penalty under Section 271B: 0.5% of total sales/turnover/gross receipts, subject to a maximum of ₹1.5 lakh. However, if reasonable cause is demonstrated, the Assessing Officer may waive the penalty under Section 273B.

For exam purposes, the key statutory linkages are: Section 44AB (mandate), Section 271B (penalty), Section 273B (waiver), and Section 119 (CBDT's power to extend). The CBDT does extend deadlines periodically — historically, extensions to October 7 or October 15 have occurred — but each year the profession lobbies for more time. This cycle is exam-relevant because examiners test both the static framework (threshold, penalty cap, applicable form) and recent CBDT circulars.