What is IGST in Credit Card?

So, what is IGST in credit card bill? In simple terms, IGST (Integrated Goods and Service Tax) is a type of Goods & Service Tax that applies to transactions when the seller and buyer are from different states.

You can find the IGST in the credit card bill when you buy services or goods from a supplier who is from a different state than yours. For example, you will find the IGST in the invoice or bill when the product that you buy online is supplied from a different state.

I want you to remember that the IGST is applied only if the merchant is from a different state than you are. For every other case of an intra-state supply of services or goods, SGST (State Goods & Service Tax) and CGST (Central Goods & Service Tax) are applied on the bill.

Let’s say a businessman Pourush from Gujarat had sold goods worth Rs. 2 lakh to Jayati from Maharashtra. Now, the GST rate (let’s assume 18%) that would be charged on this amount will be referred to as IGST. In this case, the dealer will have to charge Rs. 36000 as IGST.

I hope now you have the answer to your “What is IGST in credit card bill” question!

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When I was going through my billing history on the HDFC net-banking site, I saw the IGST VPS Rate-18.0 entries. It was mentioned in the unbilled section even though I had not used my credit card that month. I did research on this, and, I found the reason for having IGST on credit card.

Every major bank allows its customers to convert their credit card transactions into EMI payments. This allows them to affordably pay for items in monthly installments. However, with the introduction of the GST, you will be charged GST on the due credit card EMI payments. The GST on credit cards when you convert purchases into EMIs is 18 percent.

As Somnath mentioned, the full form of IGST is Integrated Goods and Service Tax. It falls under the Integrated Goods and Service Tax Act 2016. Revenue collected from IGST is divided between State Government and Central Government as per the rates mentioned by the government.

• The IGST-VPS at a rate of 18% is a service charge as per the new IGST system in our country.

• To know about its full form, I called the customer support team of my bank, but all they told me is that it is a banking code related to debit/credit card transactions.

• IGST-VPS charges apply to the Interest part of your credit card EMIs.

• Sometimes you may also get IGST-VPS debits for processing fees and late payments related to credit card loans.

• As far as I know, banks don’t charge IGST on other regular transactions people make through the card.

Please note: This calculation is made on an assumption that the customer had to pay the late payment fee of Rs. 700 and total interest of Rs. 1000. So, if he pays the dues on time, Rs. 700 will be out of the equation during the tax calculation.

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I hope now you know what is IGST on credit card.

IGST stands for Integrated Goods and Services Tax. It is a type of tax levied on the supply of goods and services that involve the movement of goods from one state to another or from a Union Territory to a state. In the context of

IGST

on credit card HDFC transactions, when you make a payment using your HDFC credit card for a transaction that attracts IGST, the tax is included in the total amount that you are charged.

The seller who is selling the goods or services is responsible for collecting the IGST and depositing it to the government. The GST rates applicable to a particular product or service are different, as GST has different tax slabs, such as 5%, 12%, 18%, and 28%.

Remember that IGST is one of the important components of GST.

Other components of GST are Central Goods and Services Tax (CGST) State Goods and Services Tax (SGST) or Union Territory Goods and Services Tax (UTGST), these depend on whether the transaction is within the same state or union territory.

When you receive your HDFC credit card statement, you will see the tax amount (IGST, CGST, SGST/UTGST) as a separate line item along with the details of your transaction. This is to assure you of the transparency in tax collection and reporting under the GST regime.

I hope you have better clarity on what is

IGST in HDFC credit card.

I can tell you about the IGST credit card. I recently used my credit card to buy products for my firm in Mumbai of Rs. 1 lakh from a Delhi seller. I have therefore been billed 18% IGST. To put it simply, it's a tax imposed on the transfer of products and services between Indian states. 

What is IGST in Credit Card Statement?

You can understand it with an example. Suppose you are in Kolkata and shop for a mobile online from Amazon Cloudtail shop located in a different state like Mumbai. In this case, when you receive a bill from Cloudtail, Mumbai, you will notice the credit card IGST rather than CGST/SGST. 

Since the transaction in this instance involves the transfer of items from one state to another, IGST will be imposed. The credit card statement will prominently display the amount of the IGST in addition to the purchase information and the total amount owed.

If you have an EMI on your credit card, you are also going to see IGST displayed on your credit card bill. This will happen until the last EMI payment. 

You can calculate IGST from the below formula:

(Goods Value x IGST Rate)/ 100

• In the case of an interstate transaction, the seller is required to include

  IGST billing

  on the invoice. Following payment by the customer, the vendor sends this sum to the central government.

• To comply with IGST rules, both the buyer and the seller in an interstate transaction must have a

  valid GSTIN

  (Goods and Services Tax Identification Number).

• The central government has

  control over IGST

  . It makes consistent tax administration and collection on interstate supply easier.

• Products and services that have been

  exported or imported

  into India are also subject to IGST. 

I hope you found this answer about the IGST credit card helpful.