New UPI MDR rule may complicate payments for LPG cylinder delivery
NPCI's proposed 5 rupee charge on transactions above 2,000 rupees from October 15 has LPG distributors worried about UPI payments at delivery
New changes coming to digital payments and UPI across the country could also affect the purchase and delivery of LPG gas cylinders. NPCI has proposed levying an MDR, or Merchant Discount Rate, on certain merchant transactions above 2,000 rupees, and this charge is expected to affect the sale of LPG cylinders as well. Kitchen gas distributors are currently assessing how much this new charge will affect their business. Under the proposal, a 5 rupee MDR will apply from October 15 on certain transactions above 2,000 rupees.
The price of a 19 kg commercial cylinder is more than 2,500 rupees, so it is very likely to attract the 5 rupee MDR. Notably, the price of the 19 kg commercial LPG cylinder was raised from 2,738 rupees to 2,747.50 rupees on September 1, an increase of 9.50 rupees.
The real concern is more about domestic LPG. The price of the 14.2 kg domestic cylinder is less than 1,000 rupees, so distributors remain confused about whether the charge will apply directly to customer payments. Distributors' biggest worry concerns UPI payments made at the time of delivery. At many LPG agencies, delivery staff collect cylinder payments from customers on their personal UPI accounts and transfer the amount collected through the day to the agency's account in the evening. In such cases, the lump sum transferred by staff in the evening could fall within the scope of the new MDR.
Distributors say each delivery staff member is not given a separate QR code, which is why accepting payments through personal UPI accounts has become common in many places. In such a situation, the only options left are to accept cash payments or ask customers for an additional amount. For this reason, distributors are preparing to raise the issue with the government and will demand that LPG distribution be exempted from the MDR.
NPCI has proposed levying a uniform 5 rupee MDR on transactions above 2,000 rupees in certain merchant categories such as railways, telecom, insurance and fuel. It is being said that this flat charge has been proposed in place of the earlier variable rate of 0.4 percent applicable in some categories, so as to keep costs under control in low-margin sectors.
