1261 charged as gst on the emi payment of no cost emi!!

[Agni]

I had a no cost emi for 1.18 lks for 9 months , i was told only processing fees of 199 + gst will be deducted now i am see gst every month on the interest amount !!
Any way to get the 1261 back from the bank ?

Attach the total calculation excludung the processing fees !!

 

[abhimarda]

I had a no cost emi for 1.18 lks for 9 months , i was told only processing fees of 199 + gst will be deducted now i am see gst every month on the interest amount !!
Any way to get the 1261 back from the bank ?

Attach the total calculation excludung the processing fees !!

That's the earning of the bank! They will not tell you this but GST needs to be paid to govt and bank will not refund GST. Hence a no cost EMI to be taken only if you are getting a cashback (higher than GST to be paid) which otherwise you were not getting in full payment assuming no liquidity issues). The longer term of EMI you take the higher gst you pay.

 

[ajaych7777]

I had a no cost emi for 1.18 lks for 9 months , i was told only processing fees of 199 + gst will be deducted now i am see gst every month on the interest amount !!
Any way to get the 1261 back from the bank ?

Attach the total calculation excludung the processing fees !!

In No cost EMI the GST is chargeable for interest component so, ultimately you've to pay that amount
They only provide you the discount on interest on the principal amount but you've to pay GST

 

[Skylar]

I had a no cost emi for 1.18 lks for 9 months , i was told only processing fees of 199 + gst will be deducted now i am see gst every month on the interest amount !!
Any way to get the 1261 back from the bank ?

Attach the total calculation excludung the processing fees !!

The first thing to be noted is that GST is already calculated when your NO Cost EMI is divided into 9 parts.

- You are not paying extra every month; it is already in your bill!
- Calculate all the EMI's total you are paying 118559.95/- in total in that 199+ 35.82 (18 GST) = 234.82 possessing fee.

So, removing processing fee you are paying 118325.13/-
What's the problem in it, you said your no cost emi is of 1.18lks

 

[Skylar]

That's the earning of the bank! They will not tell you this but GST needs to be paid to govt and bank will not refund GST. Hence a no cost EMI to be taken only if you are getting a cashback (higher than GST to be paid) which otherwise you were not getting in full payment assuming no liquidity issues). The longer term of EMI you take the higher gst you pay.

In No cost EMI the GST is chargeable for interest component so, ultimately you've to pay that amount
They only provide you the discount on interest on the principal amount but you've to pay GST

You people have to note that
Interest and GST is already calculated when you purchase the item and it divided and shown to you, if you buy 100/- worth Item and it is split into 9months Emi then 100/9 - 11.11 (and in that 11.11 you principal and interest and GST will be there) only extra you pay is Processing fee and GST on processing fee.


If you calculate the above picture you'll find it clearly.

 

[Skylar]

 

[cooljack08]

My understanding is that in a NO Cost EMI the interest part is given as upfront discount. But GST on the interest component is payable monthly.
So, for a product of 1000 with normal interest of CC@14%- total interest comes to 140. For NO Cost EMI, this 140 is deducted from product listed price (upfront discount) and you pay 860. On monthly bills, GST is payable on the interest component.

 

[abhimarda]

View attachment 752

That's not the whole amount he will pay. Apart from this he has to pay 18% interest on the entire interest portion. The bank EMI calculation has just not noted the extra gst which will come apart from the EMI in credit card statement.

 

[Skylar]

That's not the whole amount he will pay. Apart from this he has to pay 18% interest on the entire interest portion. The bank EMI calculation has just not noted the extra gst which will come apart from the EMI in credit card statement.

Not apart bro, see it, Interest and GST on it is already included. Check the table carefully.

 

[abhimarda]

Not apart bro, see it, Interest and GST on it is already included. Check the table carefully.

I have already checked...and I have also faced this. Included below is screenshot where I have shared part of credit card bill where you can see Interest 1st installment, principal 1st installment, interest 2nd installment, principal 2nd instalment, GST on interest 1st instalment and GST on interest 2nd instalment separately. If you add instalment1 and interest 1 that equals instalment 2 and interest 2 which is what was supposed to be the EMI...but when you add the GST then it is no more equal...and hence not part of EMI either.. GST on interest is never included in instalment..that is paid over and above EMI ..hence no cost EMI is not really no cost...it has processing fee + GST and GST on interest paid. The interest portion is only refunded.

 

[Skylar]

I have already checked...and I have also faced this. Included below is screenshot where I have shared part of credit card bill where you can see Interest 1st installment, principal 1st installment, interest 2nd installment, principal 2nd instalment, GST on interest 1st instalment and GST on interest 2nd instalment separately. If you add instalment1 and interest 1 that equals instalment 2 and interest 2 which is what was supposed to be the EMI...but when you add the GST then it is no more equal...and hence not part of EMI either.. GST on interest is never included in instalment..that is paid over and above EMI ..hence no cost EMI is not really no cost...it has processing fee + GST and GST on interest paid. The interest portion is only refunded.

You are not understanding.

See I bought a product for 1000/-

now 3 months EMI 1000 + 118 (imagine 100 +18%GST) total 1118/-
My 1000 will be split into 3 parts = 333.3/-
And in that 333.3 only (Interest and GST will be there)
If interest in 3%
3% of 333.33 =9.9 and 18% GST of 9.9 =1.79
your bill will be shown
Amount due 321.54
Interest = 9.9
GST = 1.79
Total: 333.33

 

[abhimarda]

You are not understanding.

See I bought a product for 1000/-

now 3 months EMI 1000 + 118 (imagine 100 +18%GST) total 1118/-
My 1000 will be split into 3 parts = 333.3/-
And in that 333.3 only (Interest and GST will be there)
If interest in 3%
3% of 333.33 =9.9 and 18% GST of 9.9 =1.79
your bill will be shown
Amount due 321.54
Interest = 9.9
GST = 1.79
Total: 333.33

I have understood completely and only then I am saying. Once your credit card bill comes you will see three components, principal component, interest component and GST component separately. As EMI stands for equated monthly instalment once you add the GST they do not remain equated. Also I must tell, at the end of the tenor , I got only the total of interest component reverse credited to my credit card and not the GST. Meanwhile, EMI is not calculated the way you have done. The principal amount in first month will be lower than principal amount in 2nd month while interest first month will be higher than interest in second month and so on.

 

[abhimarda]

@Skylar ....putting below a summary of transactions of mine on a no cost EMI purchase of phone of 18999. The total interest paid was close to Rs.509 and the reversal of interest to make it no cost is also close to Rs 509 but the GST amount paid on interest of Rs 91.54 was not reversed. And obviously Processing fee and GST thereon was not reversed either.

 

[cooljack08]

You are not understanding.

See I bought a product for 1000/-

now 3 months EMI 1000 + 118 (imagine 100 +18%GST) total 1118/-
My 1000 will be split into 3 parts = 333.3/-
And in that 333.3 only (Interest and GST will be there)
If interest in 3%
3% of 333.33 =9.9 and 18% GST of 9.9 =1.79
your bill will be shown
Amount due 321.54
Interest = 9.9
GST = 1.79
Total: 333.33

This calculation is for normal EMI transaction not NO Cost EMI

 

[abhimarda]

This calculation is for normal EMI transaction not NO Cost EMI

This calculation is not for EMI either...that's not how EMI is calculated. A simple division of principal by number of months is not done to get the principal amount to be paid per month. And calculation of EMI and no cost EMI is same ....just that the interest amount is credited back..effectively banks saying since we have not charged interest hence it is no cost. But GST on interest is a cost borne by borrower.

 

[abhimarda]

Refer below

 

[cooljack08]

This calculation is not for EMI either...that's not how EMI is calculated. A simple division of principal by number of months is not done to get the principal amount to be paid per month. And calculation of EMI and no cost EMI is same ....just that the interest amount is credited back..effectively banks saying since we have not charged interest hence it is no cost. But GST on interest is a cost borne by borrower.

Yes that is correct. EMI is generally calculated on reducing rate. I was talking about the differences in the interest and GST calculation of EMI/NC EMI