Union Petroleum Minister, Dharmendra Pradhan assured that there will be no additional charges on digital transactions made at petrol stations; he was making an attempt to douse the charges of bullying, as petroleum dealers threatened to stop accepting credit and debit cards after January 8, 2017 midnight, which was later extended for five more days by the All India Petroleum Dealers Association (AIPDA). Pradhan also announced that neither the customers nor petrol pumps will bear additional charges on digital transactions. The issue will be resolved, after meeting Finance Minister Arun Jaitley over the matter.
Regarding the issue, it is a business module between banks and oil marketing companies which they will resolve. The Government will abide by guidelines issued in February 2016 wherein it stated that customers won’t bear extra charges on digital transactions. Pradhan also added that since it focuses on sharing of the merchant discount rate (MDR) charges between petrol pumps and banks, none of which will be passed on to consumers.
Under the present situation, where the cash crunch still continues even after the 50 days of the note ban since November 8, last year, the threats issued by AIPDA would create yet more chaos as the smaller denomination note are yet to be in full circulation.
The AIPDA decision not to accept payments through cards came at a time when the Centre had directed state-run oil companies to offer a 0.75 per cent discount on price of petrol and diesel to consumers paying by cards or mobile wallets to encourage people to move towards digital payments. This discount amount was supposed to be reimbursed to the dealers but is not being executed properly.
In Meghalaya, only a few petrol stations are accepting credit and debit cards payment, so also during the note ban period, most of the stations refused to accept the old Rs 500 and Rs 1000 notes. Whereas, special amenities were extended to the petrol stations in the North Eastern Region, Assam in particular, yet the consumers from these sectors have been deprived of such facilities.
The exemption only for petrol stations for no additional levy on digital transaction, as an attempt to encourage people to move towards digital payments, knowing well that the petroleum dealers have been working on a low margin and demanded raising the dealers’ commission to 5 per cent from the existing 3 per cent taking petrol and diesel together, have been deprived off the other segments of transaction, particularly for the essential commodities, similar immunity is most essential.
The Central Government recently announced that service charges in restaurants are not mandatory, on their premises that service charges are discretionary or voluntary and can be waived if the consumers are not satisfied with the services. Instead of this, the government should waivered off the one percent levy additional transaction charge on every single transaction.
Even prior to the demonetization, most of the credit and debit cards holders hesitated to use cashless transaction to avoid paying the one percent transaction charge, one can imagine how will the common citizen, where every single paisa counts will have to shell out an additional one percent levy only to make India a Cashless nation.
The ATMs services are already being charged by the respective bank annually and at times if one uses the card more than five times in a month, an additional transaction fee is charged so why do we have another one percent for digital transaction? This will only be a stumbling block to the efforts towards India going cashless.
Since special formula are being worked out for petrol stations, why not for all digital transactions if the Modi government is serious to encourage consumers paying by cards or mobile wallets to encourage people to move towards digital payments? The one percent levy should be removed.