Key Points
Many people who cant clear their dues in one credit cycle prefer converting the purchases into EMIs so that they can pay a much lower interest rate than that on the revolving credit on their spends..
As per the notifications issued by the central government, services by way of extending deposits, loans or advances in so far as the consideration is represented by way of interest or discount (other than interest involved in credit card services) has been exempted from GST, says Surana...
In other words, the interest amount on non-credit-card lending is exempt from GST payment but the interest charged on credit cards attracts GST...
These are not exempt from GST and there is an 18% incidence of GST which applies over and above the interest component on credit card transactions, says Surana...
This point was clarified recently when the Calcutta High Court took a view that the interest component on credit card EMI transactions are not covered by the exemption notification and so will attract GST...
