Bhopal, Sep 18 (IANS) The Petroleum Dealers Association of Madhya Pradesh has demanded that the government roll back the decision to levy a transaction tax on digital payments above Rs 2,000.
The association said 4,700 petrol pumps across the state are considering stopping acceptance of UPI payments above Rs 2,000 from October 16. It argued that the Merchant Discount Rate (MDR) and related charges on such transactions impose an unsustainable burden on dealers who already operate on thin fixed margins.
In a letter addressed to Ajay Srivastava, Chief General Manager and State Head of the oil industry at Indian Oil Corporation’s Bhopal office, the association demanded complete and immediate exemption from MDR and other transaction charges on UPI payments above Rs 2,000 at petrol pumps.
Association President Ajay Singh said fuel is an essential commodity linked to daily needs and the transport system, not an ordinary commercial product. He noted that transactions above Rs 2,000 are routine at petrol pumps. He argued that deducting charges from the already limited margin solely because the customer chooses UPI cannot be justified.
According to the association, the cost on each UPI transaction above Rs 2,000 works out to about Rs 5.90 (Rs 5 MDR plus 18 per cent GST). A typical pump handles around 100 such transactions daily, leading to an extra daily outgo of roughly Rs 590, or about Rs 17,400 per month. Across 4,700 pumps in the state, the collective monthly burden is estimated at approximately Rs 8.17 crore.
Operating costs for pump owners, salaries, electricity, and other expenses are already rising. The association said the additional MDR charges on UPI make the business even more difficult.
It maintained that oil companies, rather than dealers, should bear these charges. While refusing legal tender is a separate legal matter, the association pointed out that dealers are not compelled to accept digital payments without limit.
The association has urged the oil companies and the government to review the policy so that dealers are not forced to absorb the extra cost.
–IANS
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