In a major policy shift aimed at reducing cash-based transactions and encouraging digital payments, the federal government is considering a dual pricing and taxation mechanism in the 2025–26 budget. The initiative will apply across fuel stations, retail outlets, and other service sectors.
Under the proposed system, official petroleum prices announced by the government will be applicable only for digital payments.
Consumers opting to pay in cash for petrol or diesel will incur an additional surcharge of Rs. 2 to Rs. 3 per liter. Fuel stations will be legally mandated to provide multiple digital payment options, including QR codes, card terminals, and mobile payment platforms, alongside traditional cash payments.
Digital transactions will attract the standard 18% General Sales Tax (GST), while cash payments will be subject to an additional 2% GST, effectively raising the cost for cash-based purchases. Importers and manufacturers will also be required to implement this pricing structure when supplying goods to retailers and distributors.
Furthermore, new legislation will require all businesses—regardless of size or sector—to facilitate both cash and digital payment options. To accommodate small enterprises and reduce infrastructure costs, QR code-based payments will be permitted in place of full-scale point-of-sale (POS) systems.
