No Cost EMI Explained: Is No Cost EMI Actually Free?

[FinoGuy]

One thing you should add here is why banks do levy GST on interest because very few people understands this. Let me try this here.

Supoose you Price of product is ₹100(excluding GST) and GST is 10% so price for customer is ₹110.
Now if shopkeeper is selling product for ₹90 than GST will be 10% of ₹90 which ₹9 so price for customer is ₹99.

So in above example you can see shopkeeper reduced price by ₹10 but for customer it is changed by ₹11.

Now when you purchase something in No Cost EMI you get discount worth of interest deducted from price. So Invoice of product is of less price. again take above example where product is of ₹110(including GST) if ₹10 is interrest than invoice is made of ₹100 only where ₹90.90 is price and ₹9.10 is GST.
So here shopkeeper had to pay only ₹9.10 out of pocket for interrest payment not ₹10.

But But But assuming customer doesn't forclouse or cancel EMI than

In which price customer gets the product. Is it ₹110 os is it ₹100. Answer is ₹110 so GST of ₹10 needs to be paid but only ₹9.10 is paid.
So banks has to levy GST on intrest which would be ₹0.90 in total here. so banks do levy GST on No Cost EMI but not on other EMIs. So this money is actully going to shopkeeper who promised you 10% disocount but only provided 9.10 % in our example. So next time don't blame government but blame yourself for not thinking this thorough.

In case of forclosure or cancellation actual price of product in customer's hand goes down so does GST.

This hidden trick where shop and bank able to sneak some money out of your pocket while putting blame on government is legal but moral according to me and someone should file legal case on this on 'No Cost EMI' naming.

In this trick extra money which you'll pay will depends on 2 things GST rate on product and EMI interrest rate provided by bank. However on most cases you don't know EMI interrest rate taken by bank.

Example:-
1) ₹110 product (including GST)
GST 18%
Bank rate 16% annual
duration 6 months

₹105 loan and ₹5 would be interrest
so you would pay 18% GST on ₹5 which is ₹0.9

2)₹110 prodct(inclusing GST)
GST 18%
bank rate 22% annaul
duration 6 months

₹103 loan and ₹7 would be interrest
so you would pay 18% GST on ₹7 which is ₹1.26

so for same product with simple trick you have to pay ₹0.36 more and most of people won't even know on which rate bank is giving you loan.


@TechnoFino Can we create some presurre here by fighting legally.

Another perspective :
Basics :GST is a type of tax, tax is levied on earning. In this case interest is bank's earning. Hence bank has to pay certain tax to govt i.e gst.
Amazon is paying the interest indirectly by giving upfront discount to customer. So technically bank has earned this interest amount hence liable to pay gst to govt. The same is passed on to customer as a good deed..

 

[Aksh3213]

@TechnoFino
Want to save foreclosure charge and processing fees as well?
You can cancel not foreclose EMI conversion and pay the full amount upfront.
Just contact the bank after 3 days of transaction and ask for cancellation. Get processing fees and GST refunded. 🔥

For Axis bank, they allow to cancel within 30 days,
4 days for HDFC.

Ref: Check screenshot attached.

I did a ncemi transaction on 11th feb and the transaction is settled on 12th feb morning. Not converted into emi yet. My statement date is 12th. What should be my course of action to get the benefit of ncemi interest?

 

[kvagarwal]

I did a ncemi transaction on 11th feb and the transaction is settled on 12th feb morning. Not converted into emi yet. My statement date is 12th. What should be my course of action to get the benefit of ncemi interest?

Just call the credit card customer support after 3 days of transaction and ask for cancellation not forclosure. 🔥

 

[Aksh3213]

Just call the credit card customer support after 3 days of transaction and ask for cancellation not forclosure. 🔥

3 days after the transaction or after the transaction is converted into emi?

 

[Aksh3213]

@TechnoFino
Want to save foreclosure charge and processing fees as well?
You can cancel not foreclose EMI conversion and pay the full amount upfront.
Just contact the bank after 3 days of transaction and ask for cancellation. Get processing fees and GST refunded. 🔥

For Axis bank, they allow to cancel within 30 days,
4 days for HDFC.

Ref: Check screenshot attached.

Why is there two debits of the amount?

 

[kvagarwal]

Why is there two debits of the amount?

thats the process for auto emi conversion. This confirms the emi conversion. These 2 debits are none of our concern btw.
Just call the bank when emi conversion happens and ask for Cancellation.

 

[Aksh3213]

thats the process for auto emi conversion. This confirms the emi conversion. These 2 debits are none of our concern btw.
Just call the bank when emi conversion happens and ask for Cancellation.

Thanks for the info 😊

 

[gauravbhati]

thats the process for auto emi conversion. This confirms the emi conversion. These 2 debits are none of our concern btw.
Just call the bank when emi conversion happens and ask for Cancellation.

So I'll hv to pay only the discounted price on the card ? No foreclosure fee, no cancellation fee and no processing fee ??

Wouldn't the merchant know that the EMI procedure is being used as the discounted scheme? 😂

 

[Enthusiast]

I need to do a transaction worth of 50k around with No cost EMI using ICICI or IDFC or BOB or Federal Bank credit card..for instant discount

So, Which bank converts my emi to full transaction without any charges now and refund any processing fees?

 

[Tonymathew]

I need to do a transaction worth of 50k around with No cost EMI using ICICI or IDFC or BOB or Federal Bank credit card..for instant discount

So, Which bank converts my emi to full transaction without any charges now and refund any processing fees?

ICICI have 30 days window period. If you cancel, they revert all the charges, including the processing fee....

 

[sxchzy]

@TechnoFino what are the charges for foreclosure of an ncemi on amex