In a bold move to curb cash transactions and boost digital payments, the federal government is set to introduce a dual pricing and taxation system for petrol, diesel, and other retail services in the upcoming 2025-26 budget. Under the new policy, government-notified petroleum prices will apply exclusively to digital payments. Customers opting to pay with cash at fuel stations will face an extra charge of Rs. 2–3 per litre.
All fuel stations will be legally required to provide QR codes, card machines, and mobile payment options alongside traditional cash payments.
The budget will also bring relief to salaried individuals, with a proposed reduction in income tax rates by 1 to 1.5 percentage points.
Digital transactions will continue to attract the standard 18 percent General Sales Tax (GST), while cash-based transactions will be hit with an additional 2 percent GST. The dual pricing and taxation system will be mandatory for all importers, manufacturers, retailers, and suppliers.
To ensure widespread adoption, a new legal requirement will mandate every business, regardless of size—to offer both cash and digital payment options. Businesses will be allowed to use QR codes for digital payments, eliminating the need for expensive POS machines.
Officials say the policy is designed to make undocumented, cash-based transactions more costly, thereby encouraging greater participation in the formal tax net. The dual-pricing mechanism is also expected to improve traceability of petroleum supply and sales, supporting the government’s broader efforts to enhance transparency and tax compliance.
