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One of the most sought-after benefits of credit cards is the option to convert purchases into convenient and affordable EMIs. This feature allows you to pay for the purchased items in easy monthly instalments. 


However, with the introduction of the Goods and Services Tax (GST), your credit card EMI payments attract GST. Read on to know more about GST on credit card EMI. 

Credit Card GST Rate on EMI Transactions

Are you wondering how much GST you have to pay on credit card EMIs? The applicable GST on credit cards, when you convert bills into EMI, is currently set at 18%. 


Earlier, the EMI conversion facility and other credit card payments attracted a 15% service tax. However, the Goods and Services Tax has superseded service tax. 

GST Applicable on Credit Card EMI Payment

The 18% GST on credit card EMI payments is applicable to the EMI interest component as well as the processing fee. It is essential to note that the same percentage of GST will also be applicable on the credit card interest rate levied if you miss your credit card EMI payments. 

This interest can keep accumulating if you delay repayment, spiralling into an amount that can be difficult for you to repay. So, ensure you prioritise credit card repayment and adhere to the due dates. 


Late or missed EMI repayments can get you stuck in a debt trap, causing financial distress. Setting EMI payment reminders can assist you in paying your credit card EMIs on time. 


Also keep in mind that credit card EMIs are not the only payments that attract 18% GST. GST on credit card payments also applies to:

  • Annual fees

  • Joining fees

  • Late payment fees

  • Charges for spending over your credit card limit 

  • Foreign exchange fees

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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 18% credit card EMI GST rate is followed as a norm. To understand this, consider this 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 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, compare the best credit cards online on Bajaj Markets. Evaluate your options and submit a few details to instantly apply for a credit card that addresses all your financial needs!

Impact of GST on Credit Cards

The introduction of the Goods and Services Tax brought significant changes in the area of finance. This tax reform also impacted credit cards, including credit card companies as well as users.


Read on to know some essential points regarding the impact of GST on credit card transactions and more:

1. GST is Levied Only Once

The GST on credit card transactions is charged only once, irrespective of the mode of your transaction, i.e. cash payments or card payments. Therefore, there are no chances of double GST on credit card payments made by you.

2. Negligible Change in Service Tax

The GST on credit card transactions is 18%. This is 3% higher than the previous service tax rate of 15%. The 3% change in the tax is negligible in the long run. 


Also, it is important to know that utility bill payments through your credit cards are not subject to GST. Utility bill payments through credit cards were not subject to any service tax earlier too. So, there has been no change in utility bill taxation. 

3. No Change for Non-Defaulters

Paying your credit card bill late also attracts a penalty. This used to come with a service tax of 15% but has now changed to 18% GST. This change is very minimal, resulting in a negligible increase. 


Also, it is important to note that this penalty is levied only on late payments. By paying your credit card bills on time, you can avoid the penalty and the 18% GST charged on the penalty.

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FAQs on GST on Credit Card

Why is there GST on my credit card?

As per government regulations, all credit card services incur tax in the form of GST. The current GST for 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.

How much GST do you have to pay on credit card EMIs?

GST on credit card EMI stands at 18%. Along with the EMI payments, a GST of 18% is charged on other credit card services as well.

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