In India, a standard 18% GST (Goods and Services Tax) is applied to all credit card processing fees, including annual maintenance fees, interest payments, late payment charges, and EMI processing fees. This 18% tax is calculated on the fee amount, not the total transaction value. For example, a ₹500 fee incurs an additional ₹90 in GST, bringing the total to ₹590.
As per prevailing rules, the GST on credit cardsin India is levied at a standard rate of 18%. This applies to various credit card-related fees and services. It includes annual fees, late payment charges, interest on revolving credit, processing fees, and other charges.
You pay by credit card and again when you review your bank statement you see a different amount from the invoice because of the surcharge added to the transaction. The credit card surcharge carries GST because the underlying purchase was taxable.
The 18% GST on processing fees, prepayment penalties, and late payment fees add to the total fee that you pay.
2022, Works contract services provided to Central and State Government, or Local Authorities, which were earlier eligible for concessional rate of 12% GST,would attract GST at the rate of 18% in view of amendment carried out in notification No. 11/2017- Central Tax (Rate) vide notification No.
GST is a broad-based tax of 10% on most goods, services and other items sold or consumed in Australia. To work out the cost of an item including GST, multiply the amount exclusive of GST by 1.1. To work out the GST component, divide the GST inclusive cost by 11.
GST Exemptions and Exclusions
Similarly, the principal amount is a mere transfer of money and is not considered a supply of goods or services to be subject to GST. Processing fees for handling your loan application are subject to an 18% GST.
The following category of tax persons are exempted from payment of 1% of GST in Cash 1. Registered taxpayers who have paid income tax above Rs 1.00 in Income Tax during the last two years continuously 2. Taxpayers who have zero-rated supplies without payment of duty and claimed refund of more than Rs 1.00 lac 3.
The visa application and preparation services by a migration agent provided to recipients based overseas are GST-free. The taxpayer provides migration services to the public.
Typically yes, credit card surcharges are taxable. Surcharges are generally treated as part of the total sale. That means they get lumped into the final amount sales tax is calculated on.
Credit Card Processing Fees: What Small Businesses Should Know in 2025. Credit card processing fees vary by payment processor and pricing structure, but in general, they're 1.5% to 3.5% of the transaction.
As an Australian business, if you opt to apply a card processing fee, those surcharges are generally inclusive of GST.
Using 90% of your credit limit creates a very high credit utilization ratio, which significantly hurts your credit score by signaling high risk to lenders, though you won't "overdraw" it like a bank account; it can also lead to higher interest rates (Penalty APRs), so it's best to keep utilization below 30%, ideally even lower, by paying down balances.
Certain goods and services are exempt from GST due to their essential nature. This exemption applies based on the type of supply, not the supplier. Example: Healthcare services, educational services, and public utility services (e.g., water supply) are exempt from GST.
Manufacturers and traders typically have a GST Composition Scheme rate of 1% of turnover. Restaurants and service providers under the Composition Scheme usually face a rate of 5% of turnover. Participants in the scheme cannot claim Input Tax Credit (ITC) on their purchases.
India's GST regime is undergoing a landmark transformation with the 56th GST Council meeting unveiling GST 2.0 - next-generation reforms simplifying tax slabs to 5%, 18%, and 40%. Effective from September 22, 2025, these reforms aim to ease compliance, boost consumption, and fuel economic growth.
Under the GST/HST, a supply of a financial service is an exempt supply, unless it meets the conditions for being a zero-rated supply, which is a supply that is taxable at the rate of zero percent. In either case, no tax is payable on a supply of a financial service.
The standard GST rate is 18% on all loan-related processing or administrative fees. Yes, if the loan is used for business purposes and the borrower is registered under GST.
These include bank transfers between accounts, stamp duty, depreciation and salary/wages. These are purchases/sales that have a 0% GST rate. Examples include, purchasing items from overseas (exports); purchasing items from within Australia that are not subject to GST, eg. fresh food, some education.
Find the GST Amount:
Multiply the base price by 0.1. $500 × 0.1 = $50. The GST is $50.
The normal method for GST is subtracting the amount you paid on purchases (aka ITCs) from what you collected on your sales. This is the amount you must remit to CRA or if you paid more GST on your purchases than you collected on sales, CRA will send you a refund.
Subtracting GST from Price
To calculate how much GST was included in the price, divide the total price by 11 ($1000∕11=$90.91). To calculate the price without GST, divide the price by 1.1 ($1000∕1.1=$909.09).
For any standard-rated supplies of goods or services that you make on or after 1 Jan 2024, you must charge GST at 9%. For instance, if you issue an invoice and receive payments for your supply on or after 1 Jan 2024, you must account for GST at 9%.