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Credit Card GST Rate on EMI Transactions

One of the most sought-after benefits of credit cards is the option to convert purchases into EMI. This feature allows you to affordably pay for items in monthly instalments. However, with the introduction of the Goods and Services Tax, your credit card EMI payments are due to attract GST. The GST on credit cards when you convert purchases into EMI is 18%.

GST Applicable on Credit Card EMI Payment

GST at 18% is charged on the EMI interest component as well as processing fee on credit card transactions. The details of the amount will be mentioned in your EMI payment table. Do note that the same percentage of GST will also be applicable on the credit card interest rate levied against your card in the event you fail to clear your EMI dues on time. To prevent such pile-up of credit card dues, ensure that you make your credit card payments on time.

The 18% GST on credit card transactions is also applicable on all credit card fees and charges. These include processing fees, annual fees, late payment fees, overlimit charges, foreign exchange markup fees, joining fees, etc.

Credit Card GST Charges vs. Service Tax

Before the implementation of GST, all credit card-related services attracted a 15% service tax. Post 2017, a common 18% credit card EMI GST rate is followed as a norm. To understand this, let’s take an example:

EMI Component


15% Service Tax and 18% Credit Card EMI GST Rate

Loan amount



Annual interest rate (compounded monthly)



Repayment tenor

12 months


Total interest amount


₹38.37 (Service tax)

₹46.04 (GST on credit card interest)

Processing fees


₹22.5 (Service tax)

₹27 (GST on credit card fees)

Total Service Tax = ₹60.87

Total GST Charges on Credit Card EMI = ₹73.04

For credit card users, GST does not affect the financial picture much. As a result, you can shop worry-free and opt for credit card EMI when paying for your purchases.

If you do not have a credit card yet, head to the Bajaj MARKETS website/app and compare the best credit cards online! Once you have evaluated your options from some of the best banks in the country, submit a few details and apply for a credit card that addresses all your financial needs!

FAQs on GST on Credit Card EMI

✔️Why is there a GST on my credit card?

As per government regulations, all credit card services incur a tax in the form of GST. The current GST rate on credit card services, as dictated by the GST Council, stands at 18%. This rate has replaced the earlier 15% service tax that credit card users had to pay before the introduction of GST in India.

✔️Will I be charged double GST if I pay my bills using a credit card?

No, GST will not be charged if you pay your bills in full, i.e. without opting for EMI conversion, using a credit card.