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.
Live....and Let Live!