Proposals aimed at discouraging cash purchases may be included in the Finance Bill for the fiscal year 2025–26.
The federal government has decided to take measures in the upcoming fiscal budget to promote digital payments. As part of these efforts, a proposal is under consideration to charge an additional amount—up to Rs. 3—on cash purchases of petrol from fuel stations.
According to reports, sources have stated that the aim is to discourage cash transactions across the board, including petroleum products, by imposing additional charges. These cash-disincentivizing measures are likely to be included in the Finance Bill for the 2025–26 fiscal year.
One of the proposals under review is to charge up to Rs. 3 extra for cash purchases of fuel at petrol pumps. Alongside this, fuel stations will also be encouraged to adopt digital payment methods.
Sources have said that the use of QR codes, debit and credit cards, and mobile payment solutions will be promoted. If the proposal is approved, manufacturers and importers may be allowed to charge an additional 2% tax on cash sales.
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Several meetings have already been held with the corporate sector to make this proposal feasible. Additionally, there is a proposal to impose extra tax on cash purchases made at retail stores.
Restaurants already enjoy tax exemptions on card payments. However, there will be limited tax relief for salaried individuals in the upcoming budget.
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Sources say that any relief for the salaried class will be minimal, and buyers will remain free to pay in cash but will bear the higher tax burden.
Furthermore, importers and manufacturers will be required to charge the standard 18% General Sales Tax (GST) on digital payments made to suppliers and customers. These payments will be facilitated via simple QR codes and other digital solutions.
