Basically, the system is like this.
If a IOC petrol bunk is using a POS machine issued by HDFC, and you use HDFC card(s), depending on the type of card and the facility given to you by HDFC, they will return the surcharge (with GST) - with or without reimbursement limits. Returning the GST is subjective on some cards. However, if the IOC petrol bunk using HDFC's POS machine, and you use Citi Bank card - even if it is an Indian Oil co-branded, Citi will NOT return the surcharge (so returning the GST does not arise at all).
I fought vehemently with Citi and SBI on this count. It looks stupid paying surcharge (and GST on that) despite using a IOC co-branded card, in a IOC exclusive petrol bunk, to buy only IOC products. The silliest excuse I got from Citi/Axis/HDFC/SBI - over a period of 2 years of fighting - is that EVEN THE POS MACHINE MUST BE THEIR OWN to get surcharge waiver. No where it is mentioned like that. But, by saying so, they are saving a lot of money by denying the benefit to us. How can I - as a CC holder - has any control over what type of POS the bunk uses ?
So, in protest, I returned those co-branded cards and using wallets, till 1Card came along. 1Card returns all surcharges, and even the GST, down to the last paisa. Since then, all my fuel bills are logged only on 1Card.