Fake News Alert! No Double Tax Under GST on Credit Card Payments

The rumour is false, you’ll have to pay GST only once. 

(Photo: iStock)

The GST rollout has unleashed a flood of fake messages on social media. One such message, which is doing the rounds of WhatsApp, claims that GST will be levied twice, if utility bills for services like telephone, mobile, gas, electricity are paid through credit cards.

The message says that GST will be levied once on the utility bill for the service, and once on the amount billed on the credit card as well, coercing consumers to switch to paying these bills in cash.

Revenue Minister Dr Hasmukh Adhia took to Twitter on 2 July to put an end to the rumours.

According to fake news de-bunker BOOM, even before GST, service tax was levied only on interest payments, annual charges and processing fees on EMIs. So, if one paid their bills late, a service tax would be applied on the late fee and interest charges.

Thus, under the earlier tax regime, while the billed amount was not subject to taxation, the additional charges were levied as an additional service to the consumer. Now these charges will be levied together as GST.

This ultimately means an increase in the utility bill, as the VAT that was applicable earlier has now been consolidated along with the additional cesses and service tax at 18 percent.

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