A gazette notification on the new set of rules is likely to be issued later this month.
App-based cabs in Madhya Pradesh will soon have to pay Rs 1,000 fine if they refuse rides to customers, a senior bureaucrat said on Saturday.
The proposed move is aimed at providing quality service to customers who feel harassed by the last minute refusals and cancellations.
Sources said growing number of complaints from customers have triggered the move.
A gazette notification on the new set of rules is likely to be issued later this month.
"We have charted out rules to penalise app-based cabs with Rs 1000 fine if they refuse service after booking," Madhya Pradesh Transport Deputy Secretary, Niyaz Khan, told PTI.
He said the set of rules has been forwarded to Law Department for approval.
"I think the gazette notification to this effect would be issued this month itself," said Mr Khan.
At present, ride hailing taxi operators Ola, Uber and a transportation network company are providing services in big cities in the state.
Tourist service operators have welcomed the move.
"Accountability needs to be fixed. We welcome the decision," said Rajkumar Kanojia, Bhopal Secretary, Rajdhani Travel Association, when asked about the proposal.