Double GST on credit card payments for utility bills

 

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

GST will be levied twice if utility bills for services such as telephone, mobile, gas, electricity are paid through credit cards

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 messaging app WhatsApp 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The service tax was earlier 15 per cent which has now been replaced by an 18 per cent GST on financial services.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.

Goods and Services Tax Network added Federal Bank for Goods and Services Tax payments making 20 banks as per the recent tweet dated 04/11/2022. Here is the updated list of all the Banks link 

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Rajput Jain & Associates

Rajput Jain & Associates is a Chartered Accountants firm, with it's headquarter situated at New Delhi (the capital of India). The firm has been set up by a group of young, enthusiastic, highly skilled and motivated professionals who have taken experience from top consulting firms and are extensively experienced in their chosen fields has providing a wide array of Accounting, Auditing, Taxation, Assurance and Business advisory services to various clients and their stakeholders. Rajput jain & Associates, a professional firm, offers its clients a full range of services, To serve better and to bring bucket of services under one roof, the firm has merged with it various Chartered Accountancy firms pioneer in diversified fields. We have associates all over India in big cities. All our offices are well equipped with latest technological support with updated reference materials. We have a large team of professionals other than our Core Team members to meet the requirements of our prospective clients including the existing ones. However, considering our commitment towards high quality services to our clients, our team keeps on growing with more and more associates having strong professional background with good exposure in the related areas of responsibility.

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