No. The shop pays the bank’s interest for you as a discount, but you still pay 18% GST on that interest every month, and a processing fee. If the shop gives a discount only when you pay in full, the EMI also costs you that discount.
How a 0% Interest EMI works
- The bank lends you the money at its card EMI rate (its EMI terms say what it is).
- The shop gives a discount equal to that interest, so your EMIs add up to the price.
- You still pay 18% GST on the interest part of every EMI, and a processing fee plus GST.
- EMI
- ₹10,000
- Interest, paid by the shop
- ₹2,703
- 18% GST on that interest
- ₹487
- Fee with GST
- ₹353
- Extra you pay
- ₹840 (like 4.82% a year)
If the shop also gives ₹3,000 off for paying in full, the EMI costs ₹3,840 extra: like a 22.92% loan. An example, not a quote.
Before you choose EMI
- Ask if there is a discount for paying in full. It is usually the biggest cost.
- Check the processing fee in your bank’s EMI terms. It differs by bank.
- Pay every EMI on time. A missed one brings card charges on top.
Sources
Last checked 3 Nov 2026 · by BachatLab