Monday , March 18 2019

Transaction tax: Petrol pumps to accept card payments till January 13

The threat of petrol pumps owners to reject card payments would have been an embarrassment for the Modi government

Petrol pumps

New Delhi: There was high drama on Sunday after petrol pumps owners vulnerable to stop accepting credit and debit card payments in protest against imposition of up to 1 per cent transaction tax by certain banks.

Though, intervention from top government officers, including the PMO, saw banks postponing the decision to impose transaction fee for a few more days till the issue is resolved in meeting with the petroleum ministry. After banks made the announcement, petrol pumps owners too deferred their decision and stated that they will accept card payments for now.

“The All-India Petroleum Dealers Association has received an authorised communication from oil marketing companies (OMCs) that with the involvement of petroleum minister the transaction fee charges have been deferred till January 13, 2017. AIPDA also has decided to defer the distress till January 13, 2017,” stated the association in a late night statement.

Earlier in the day, many state associations of petrol pumps owners including Karnataka, Tamil Nadu and Delhi among others vulnerable that they will not accept any card payments from Monday. All India Petroleum Dealers Association president Ajay Bansal stated that HDFC and Axis banks have demanded up to 1 percent Merchant Discount Rate (MDR) on each transaction. “Our margins are not so much that we can accept this one per cent charge on each transaction. We have particular mechanism to compute the margin and these do not have any scope for MDR charges. This will lead to financial losses for the dealers,” stated Mr Bansal.

The threat of petrol pumps owners to reject card payments would have been an awkwardness for the Modi government which has been tom tomming increase in cashless transactions as a major achievement of demonetisation of Rs 500 and Rs 1,000 currency notes on November 8.

A senior officer from HDFC bank said to the source that the imposition of 1 per cent transaction charge in the form of Merchant Discount Rate was an industry decision which has been taken by all the banks. “We may have been one of the first to notify the petrol pumps owners but this is a decision taken collectively by all the banks. It is not a decision only taken by us,” stated the official.

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