Political News

Double GST on credit card payments? Here’s the truth

Dated Jul 4, 2017

Double GST on credit card payments? Here’s the truth

The GST (goods and services tax) rollout from the midnight of Friday and Saturday, other than unleashing a bit of confusion among both consumers and traders, has also led to certain rumours doing the rounds on social media. This despite the government's best efforts to spread awareness through various platforms including social media itself.
One such rumour circulating on social media is that GST will be levied twice , if utility bills for services such as telephone, mobile, gas, electricity are paid through credit cards.

The message tells consumers that GST will be levied once on the utility bill for the service, and once again on the amount billed on the credit card, urging people to either pay these bills in cash or via internet banking.
It would be important to note here that even in the pre-GST era service tax was levied by banks only on interest payments, annual charges and processing fees on EMIs (equated monthly installments), and not on credit card payments made on time. The service tax was earlier 15 per cent which has now been replaced by an 18 per cent GST on financial services. So, yes, if you pay your credit bills late, then you would be paying more because the interest or late payment charges would be taxed at a higher rate, otherwise no.

Source: www.taxindiaonline.com