top of page
  • Writer's pictureThe team

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 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. Revenue Secretary Hasmukh Adhia on Sunday took to micro-blogging Twitter to reveal the truth.

Standalone, some utility bills will be more expensive in the GST regime as broadband, mobile, piped gas, LPG cylinders etc. attract more tax under the new structure. LPG for example, has been put in the 5 per cent GST slab. Earlier, most states such as Delhi did not tax the green fuel, while some levied VAT (value added tax) ranging between 2 and 4 per cent.

Broadband and mobile bills also will get more expensive under GST as telecom services have been put under the 18 per cent bracket compared to the 15 per cent tax levied in the pre-GST regime.

So, while some bills go up and late credit card payments get taxed around 3 per cent more than before, there is definitely no paying GST twice. GST is India's most ambitious tax reform+ since its independence in 1947 and subsumes over a dozen central and state taxes that were levied on goods and services bringing India under a uniform tax regime. The new tax regime implemented by the Narendra Modi government which has been in the works for over 15 years is expected to add 2 per cent to the country's GDP (gross domestic product).

7 views0 comments
bottom of page