Gst on each emi

[Raj2708]

Hi..
I took a product from reliance degital from HDFC no cost emi.
Last month on 1st emi it was the emi instalment+processingfee199 with 35as gst of 199.
But for this month statement additional gst of 159 is added on the 2nd installment.
Previously there was no gst on each installment.

I opted for emi in July only for first time. Newbie in this things currently.
Anyone please explain the scenario.

 

[TaxWiser]

Hi..
I took a product from reliance degital from HDFC no cost emi.
Last month on 1st emi it was the emi instalment+processingfee199 with 35as gst of 199.
But for this month statement additional gst of 159 is added on the 2nd installment.
Previously there was no gst on each installment.

I opted for emi in July only for first time. Newbie in this things currently.
Anyone please explain the scenario.

Hi there!
I understand your confusion. Here's a breakdown of what's happening with your HDFC no-cost EMI:

1. Processing Fee and GST:

- When you opt for a no-cost EMI, a processing fee (₹199 in your case) is often charged. This fee is subject to GST (18%), which amounts to ₹35.82 (rounded to ₹35).​

2. GST on Interest:

- Even though it's called a "no-cost" EMI, GST is still applicable on the interest component of the EMI. This might not have been clear initially, but it's a standard practice.​

3. Additional GST:

- The additional GST of ₹159 on your second installment could be due to the GST on the interest portion of the EMI. This might not have been charged in the first month but is now being applied.​

Why This Happens:

• First EMI: The first EMI often includes the processing fee and its GST.
• Subsequent EMIs: GST on the interest portion of the EMI might be charged separately in subsequent months.

What You Can Do:

• Check Your Statement: Review your credit card statement to see the breakdown of charges.
• Contact HDFC Customer Support: Reach out to HDFC's customer service for a detailed explanation and to ensure there are no errors.

For better understanding, consider watching this video on YT
(Source: Conversation with Gemini AI, YouTube)