More Tax is Coming for Cash Payments for Petrol, Retail, Other Services

The federal government will introduce dual pricing and taxation in the 2025-26 budget to discourage cash transactions and promote digital payments for buying petrol/diesel at fuel stations, retail, and other services, reported Dawn. Petroleum prices notified by the government will apply only to digital payments. Cash transactions at fuel stations will carry an additional charge of Rs. 2–3 per litre. All fuel stations will be legally required to offer QR codes, card machines, and mobile payment options alongside cash. The budget will also reduce income tax for salaried individuals by 1-1.5 percentage points. Digital transactions will be subject to the standard 18 percent General Sales Tax (GST), while cash-based transactions will incur an additional 2 percent GST. All importers and manufacturers will be required to apply this pricing to their retailers and suppliers. A legal requirement will be introduced requiring every business, regardless of size, to offer both cash and digital payment options. Digital payments through QR codes will be allowed to avoid the need for costly POS machines. This new policy is expected to impose higher costs on undocumented transactions and encourage everyone to enter the tax net. The dual-pricing mechanism will support that effort and improve traceability of petroleum supply and sales.