Service Tax on credit card payments

POSTED BY Anand ON March 5, 2013 12:25 pm COMMENTS (19)

Hi,

I have standard chartered bank titanium credit card and ,

In my last credit card statement, I was charged a service tax of Rs:63.

I contacted bank , and they said that : ST(Serive tax)  is not charged on retail transactions, but it is charged on card fees,late fees and other applicable charges.

In that particular month I had swiped for a pretol pump transaction for Rs: 650, and transaction charges of Rs:16 were applicable for the same.(2.5%).

I also had, a few IRCTC ticket booking transaction, on which bank charges 1.65% of charges.

So can you tell me on what basis this service tax is applied?

Is it applicable @ 12.36% on all such additional charges paid?

Bank personnel was not able to explain it to me.

Please Help.

Thanks.

 

19 replies on this article “Service Tax on credit card payments”

  1. PRATEEK says:

    HOW MUCH GST IS APPLIED ON CREDIT CARD?
    SUPPOSE I HAVE TO PAY EMI WORTH RS. 1905, SO WHAT AMOUNT I WILL HAVE TO PAY AFTER GST?

    1. EMI will be same .. GST is applied on the services and things like charges etc. Its 18% .

  2. Somanath says:

    Judiciallly use credit cards where no ST is applicable and use net banking where it is less costlier like IRCTC uses

  3. Jit says:

    Hi,

    I am buying new credit card of SBI. and joining fees rs 5000/- PA for this card.

    I want to know for joining fees is it correct to pay service tax by rate 14.50%. i.e. 5725/-. ?

  4. I booked one ticket from IRCTC using VISA

    credit card of Standard Chartered and ICICI

    Payment gateway. My Transaction amount was

    8,605.60/-, on this I got charged Rs.154.60

    (1.8% of 8,605.60) + Rs.21.69 (14 % on 154.50),

    hence in total I was charged of Rs. 8,782.19

    (8,605.60 + 154.90 + 21.69). On next bank again

    charged Rs.29.99/- mentioning SERVICE TAX &

    CESS SR @ 14.00, which I am not able to

    understand. Pls clarify

    1. Hi Manoj

      This is very specific query which you should follow up with the concerned authority only. We wont be able to comment on that

      Manish

  5. ManojHarodia says:

    I booked one ticket from IRCTC using VISA credit card of Standard Chartered and ICICI Payment gateway. My Transaction amount was 8,605.60/-, on this I got charged Rs.154.60 (1.8% of 8,605.60) + Rs.21.69 (14 % on 154.50), hence in total I was charged of Rs. 8,782.19 (8,605.60 + 154.90 + 21.69). On next bank again charged Rs.29.99/- mentioning SERVICE TAX & CESS SR @ 14.00, which I am not able to understand. Pls clarify

    1. Hi ManojHarodia

      This is very specific query which you should follow up with the concerned authority only. We wont be able to comment on that

      Manish

  6. Anand says:

    OK

    Thanks Ashal for all information.

  7. Dear Anand, while booking railway tickets, make it a habit to use netbanking only as in netbanking it’s a fixed charge of 11 Rs. (it includes service tax), irrespective of the transaction amount where as in case of credit cards, the fee is a %age figure of transaction value.

    Thanks

    Ashal

  8. Anand says:

    Yes ok, but instead, can I use my debit card and net banking and service tax wont be applied?

  9. Dear Anand, please use your CCs for only those payments where any service fee or processing fee or processing charges or surcharges are not applied.

    thanks

    Ashal

  10. Anand says:

    HI

    OK , I will check it out. Is there any way to avoid this service tax??

    Which other payment mode can be used??

  11. Dear Anand, Please check your credit card statement, carefully ther should be some more fee for other thing s which is liable to ST & thus your ST is 510 Rs.

    thanks

    Ashal

  12. Anand says:

    Hi Ashal,

    Can you tell me , how Rs: 510 would have accumulated as surcharges?

    Cause total IRCTC ticket amounts is abt : Rs: 15 k. and 1.8% surcharge, means about Rs: 280.

    Any Idea?Thanks.

  13. Dear Anand, some banks display the break up of fee & ST there on, where as some shows composite values.

    Thanks

    Ashal

  14. Anand says:

    Hi Ashal,

    Yes, that may be the case, cause total ticket amount is around 6 k+ for 6-8 people.
    I will check it out.

    In this case, if I use my debit card or netbanking , then will I be charged this Service Tax?

    means is it applicable on just CC’s or what?

    I would like to mention one more thing, 1-2 month ago, I had used my HDFC bank credit card to book IRCTC tickets, and I was not charged ST, atleast, it was not disclosed explicitly.

    So is it bank specific?

    Thanks,

  15. Dear Anand, the service tax @ the rate of 12.36% is applied on such surcharges. The total amount towards service tax is 63 Rs. which indicates that in total there are surcharges of 510 Rs. Please do check your IRCTC tickets. These are the main reason for such high Service Tax.

    Thanks

    Ashal

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