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A 'no-cost' EMI still carries a real, small cost — see exactly what it is and the effective rate it implies.
This "no-cost" EMI actually costs ₹897 in GST — an effective 2.7% rate.
GST Rate
GST On Interest
₹897
Effective Total Cost
₹60,897
Effective Rate
2.7%
vs advertised 0%
The merchant discounts the price by the interest a standard EMI at the bank's rate would have charged, making your EMI work out flat — but GST law treats that waived interest as a taxable supply regardless, so the GST portion is still charged to you, on top of the discounted price.
The GST-on-waived-interest treatment is standard across No-Cost EMI schemes in India, though the exact GST rate depends on the product/service category (commonly 18%, but varies). Always check the fine print — some merchants disclose this as a separate line item, others fold it into a slightly higher listed price.
Often yes — the effective rate is usually still lower than a regular EMI or credit card interest rate, since only the GST portion (not the full interest) reaches you. Just don't assume it's literally free, and compare the effective rate this calculator shows against other financing options.
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When a merchant offers a "no-cost" or "zero-interest" EMI, they discount the price by the interest a standard EMI would have charged at the bank's rate — but GST is levied on that interest amount regardless of who ends up paying it. That GST portion is what actually reaches you, either as a slightly higher EMI or a separate line item, and it's what this calculator surfaces.
The effective rate a no-cost EMI implies is usually still low — compare it against your credit card's own EMI conversion rate on our credit cards hub before assuming one is automatically better than the other.
Disclaimer:This is an illustrative calculation. Exact GST treatment and no-cost EMI structuring vary by merchant and bank — check the offer's terms for the precise breakdown.
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