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  • What is the meaning of Zero fuel surcharge related to refueling of petrol?

    Do you know what it means when it says "Zero fuel surcharge" while refueling the petrol? Ask our technical experts for the best explanations.

    I have heard this word, "Zero fuel surcharge" on many debit card offers. I do not know what exactly the "Zero fuel surcharge" mean. What is the meaning of surcharge? What amount of surcharge are levied at petrol pump payment system? What is the meaning of zero fuel surcharge? Does it mean person having debit card with Zero fuel surcharge, do not need to pay any fuel surcharge or tax?
  • Answers

    2 Answers found.
  • Surcharge is the extra cost added to the actual cost of the product or service availed by you. In fact, the term is used to denote the charge being applied in addition to the tax. In a way, it can be termed as additional tax on tax. For instance, you make a purchase of Rs. 100. It will attract a VAT of 5 per cent, on it you will be charged 1% surcharge for higher secondary education. This 1% is not charged on the full transaction amount of Rs. 100, but only on the tax amount of Rs. 5. Hence it is called Surcharge or Cess.
    Extending the same theory further, Fuel Surcharge is a term used for the extra amount that is charged to you when you use your credit card to make payment at a petrol station. Most of the credit card companies levy a surcharge of 2.5 per cent.
    However, as a gesture of providing a customer centric business approach, some banks reverse the amount of surcharge that has been charged to you by the card company back into your account. Thus, you end up paying only the actual amount of the fuel. Such waived off charge is referred to as zero surcharge on fuel.

    Usually, the card company charges you the surcharge when you use the card at the petrol station. The bank later credits the amount back in the next bill. However, the other regular taxes on this amount like VAT, Service tax and GST are payable.

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  • Think of surcharge as the additional charge while paying for the product. For example, most of the services and product have additional charges for swiping credit and debit cards. And in such cases the charge usually gets added to the product.

    When the Zero surcharge is applied to the product or service then you don't end up paying 2.5% of the tax added. In such case that transaction cost is waved by Bank who is allowing you the service of nil surcharge system.

    Most of the banks debit cards and credit cards have this feature. Here the transaction cost above say 1000 Rs is eligible for such zero surcharge at the fuel stations or even at some service stations. So if you use card for this amount then you don't have to pay any additional surcharges for swiping the card.

    The limit for the card be it credit or debit is set based on the amount of money spent. For example in case of credit card the amount from some banks is set at 500 Rs. In case of debit card the zero surcharge applies after 1000 Rs. So each bank and their card type makes a difference for the zero surcharge limits.

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