GST on Credit Card EMI

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

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.