GST on Credit Card EMI

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:

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!