When you pay in dollars, euros or any other currency, the card network converts the amount to rupees and the bank adds a markup, typically 3.5% on Indian cards. 18% GST is charged on the markup, so 3.5% costs about 4.13%.
It applies abroad and on foreign websites and apps, and some banks charge it on rupee payments to merchants based outside India too. Travel cards charge less, and some charge nothing.
Example
₹1,00,000 spent abroad on a card with a 3.5% markup costs ₹4,130 extra. On a 1% card it costs ₹1,180.
