Madhya Pradesh Petrol Dealers Demand Repeal of UPI Transaction Tax
Petrol dealers in Madhya Pradesh are urging the government to withdraw the UPI transaction tax on payments over ₹2,000, citing financial strain.
Bhopal, September 18 (Daily Kiran) : The Petroleum Dealers Association of Madhya Pradesh has called on the government to withdraw its decision to impose a transaction fee on digital payments exceeding ₹2,000. The association stated that 4,700 petrol pumps across the state are considering halting acceptance of UPI payments above this threshold starting October 16.
The dealers argue that the Merchant Discount Rate (MDR) and associated fees for such transactions place an unbearable burden on them, especially as they already operate on slim profit margins. In a letter addressed to Ajay Srivastava, the General Manager of Indian Oil Corporation’s Bhopal office, the association requested a complete and immediate exemption from MDR and other transaction fees for UPI payments over ₹2,000.
Ajay Singh, the association’s president, emphasized that fuel is a necessity linked to daily life and transportation, rather than a mere commercial product. He noted that transactions exceeding ₹2,000 are common at petrol stations and argued that it is unreasonable to deduct fees from limited margins simply because customers opt for UPI.
According to the association, each UPI transaction over ₹2,000 incurs a fee of approximately ₹5.90 (comprising a ₹5 MDR plus 18% GST). A typical petrol pump processes around 100 such transactions daily, leading to an additional cost of about ₹590 per day, or approximately ₹17,400 monthly. Across all 4,700 pumps in the state, the total monthly burden is estimated to be around ₹8.17 crore.
With rising operational costs, including wages, electricity, and other expenses, the association argues that the additional MDR fees for UPI transactions are making business increasingly difficult. They contend that these fees should be borne by oil companies rather than the dealers. While rejecting valid currency is a separate legal issue, the association insists that dealers cannot be compelled to accept digital payments without limits.
The association has urged oil companies and the government to review this policy to avoid imposing extra costs on dealers.
