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TAX ON CREDIT CARDS ON IMPLEMENTATION OF GST :
Dated 04.07.2017 : Service tax on financial services , which included Banking / credit cards / insurance / mutual funds etc and was charged at 15 % has been now replaced by GST at 18 % . But there is fake news being circulated in social media like Facebook , Whatapp that a customer has to pay tax twice if pays his bills through credit cards . As per the fake news , GST has to be paid twice once on the utility bills like electricity , telephone mobile etc and second time on credit card payment . The news is not correct as GST will be collected only on service charges levied by banks like annual fee , cash withdrawal charges in ATMs , late payment charges etc and not on the bill payment . Hence there is no question of paying GST on paying your bills through credit cards . GST , like earlier service tax will be levied on the amount of service charges levied by the bank and not on the transaction value . If you conduct your banking transactions within the limit allowed by the banks , banks may not levy service charges and there will be no GST payment on it .
Normally banks levy service charges on transactions like Money Transfer , Cheque Book issue , Atm cash withdrawal , annual fee on debit / credit cards , late payment charges , penal charges etc . The list is illustrative . One has to pay GST of 18 % on the service charges levied . Suppose if you draw cash from ATM using credit card , say Rs 5,000 and if bank charges Rs 300 as cash withdrawal charges , you have to pay GST of Rs 54 only at 18 % on Rs 300 only and not on Rs 5000 cash withdrawn . Similarly if you pay mobile bill through credit card and if you settle credit card bill within due date for payment of credit card , there will be no charges levied by bank and hence no GST .
Hence credit card customers can continue to make payments on their utility bills through credit cards without worrying about GST . However note to pay the credit card bill before last date as late payments attract various charges like penalty , interest etc . Such charges may be heavy and avoid them .
Dated 04.07.2017 : Service tax on financial services , which included Banking / credit cards / insurance / mutual funds etc and was charged at 15 % has been now replaced by GST at 18 % . But there is fake news being circulated in social media like Facebook , Whatapp that a customer has to pay tax twice if pays his bills through credit cards . As per the fake news , GST has to be paid twice once on the utility bills like electricity , telephone mobile etc and second time on credit card payment . The news is not correct as GST will be collected only on service charges levied by banks like annual fee , cash withdrawal charges in ATMs , late payment charges etc and not on the bill payment . Hence there is no question of paying GST on paying your bills through credit cards . GST , like earlier service tax will be levied on the amount of service charges levied by the bank and not on the transaction value . If you conduct your banking transactions within the limit allowed by the banks , banks may not levy service charges and there will be no GST payment on it .
Normally banks levy service charges on transactions like Money Transfer , Cheque Book issue , Atm cash withdrawal , annual fee on debit / credit cards , late payment charges , penal charges etc . The list is illustrative . One has to pay GST of 18 % on the service charges levied . Suppose if you draw cash from ATM using credit card , say Rs 5,000 and if bank charges Rs 300 as cash withdrawal charges , you have to pay GST of Rs 54 only at 18 % on Rs 300 only and not on Rs 5000 cash withdrawn . Similarly if you pay mobile bill through credit card and if you settle credit card bill within due date for payment of credit card , there will be no charges levied by bank and hence no GST .
Hence credit card customers can continue to make payments on their utility bills through credit cards without worrying about GST . However note to pay the credit card bill before last date as late payments attract various charges like penalty , interest etc . Such charges may be heavy and avoid them .
Credit Card basics - How to select one that's right for you?
1. Think
for what purpose you are going to use the card.
whether you intend to pay in full before due date what are the charges issuer are going to charge what will be the interest rate in case of delay what rewards you are going to get on usage. 2. Go to websites of leading issuers and compare various cards available. 3. If you intend pay in full , take card with least charges. Cards are available with no joining fee and no annual fee. 4. If you intend partial payment , take one with least interest . Our advice is to make full payment of cards before due date. Interests are very high on cards (view video below). 5. Depending up on your spending expectation like travel , shopping etc , chose specialized cards for the purpose . you will have more reward points on such usage. |
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SOME LEADING ISSUERS OF CREDIT CARDS IN INDIA
You can directly go to their links below and see what they offer
ICICI BANK LTD STATE BANK OF INDIA CITI BANK HDFC BANK LTD STANDARD CHARTERED BANK HSBC BANK LTD Most of the Nationalized banks , for example Indian Overseas Bank , also issue credit cards. If you have account with them, you can directly approach them. Even many Indian Pvt sector Bank issue credit cards . You can use your existing relationship with the bank for obtaining credit card TYPES OF CREDIT CARDS |
![]() Plan your Expenses Plan Credit Card use Tweak your Bank Account and Earn Extra Income Click Below to Read HAVE CAKE AND EAT IT |
By NET WORK :
VISA : Visa Network is most popular among all networks which connect Credit card Issuers , Merchants accepting the cards and holders of cards . Partner banks issue VISA branded credit cards which signifies that network partners of Visa accept the cards . Visa do not issue credit cards directly and they connect and facilitate payment process .
MASTERCARD : Its operations are similar to Visa and they also do not issue credit cards directly .
AMERICAN EXPRESS : American express maintains network as well as issues credit cards directly .
RUPAY : Only Indian Payment Network operated by NCPI
VISA : Visa Network is most popular among all networks which connect Credit card Issuers , Merchants accepting the cards and holders of cards . Partner banks issue VISA branded credit cards which signifies that network partners of Visa accept the cards . Visa do not issue credit cards directly and they connect and facilitate payment process .
MASTERCARD : Its operations are similar to Visa and they also do not issue credit cards directly .
AMERICAN EXPRESS : American express maintains network as well as issues credit cards directly .
RUPAY : Only Indian Payment Network operated by NCPI
Safety Tips for Usage of Cards 1. Sign the signature panel on the back of your card as soon as you get .
2. Never keep your PIN code in the same place as your card. 3. Keep your account number private. 4. Make sure your devices and networks are secure. 5. Shop online only on trusted web sites. 6. Keep your passwords a secret. 7. Have a tab on your account . Check often. 8. The most important tip - USE YOUR CARD JUDICIOUSLY Use your card for what you need to buy . Never buy just because your card has a spending limit. To understand how to manage your credit card bills efficiently, check out the video below 'Credit Card Debt Explained With a Glass of Water'. |
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Credit Card Fraud
Although there is no way to foolproof a credit card fraud, there are ways to reduce chances or reduce the damage it can do to you.
Some tips -
1. Keep tabs on your account . Check often.
2. Store the phone number of your credit card companies in your mobile for stolen credit card reporting. Call them immediately once you find out your card is stolen to cancel your card, and dispute any transactions you have not made.
Videos below offer helpful advice on these matters.
Some tips -
1. Keep tabs on your account . Check often.
2. Store the phone number of your credit card companies in your mobile for stolen credit card reporting. Call them immediately once you find out your card is stolen to cancel your card, and dispute any transactions you have not made.
Videos below offer helpful advice on these matters.
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