Calculate the true cost of invoice discounting — not just the quoted rate. See exact ₹ cost, GST breakdown, platform fees, and effective APR across TReDS (RXIL, M1xchange) and private platforms.
Every invoice discounting platform in India quotes an annual discount rate. RXIL might say 9.5%. KredX might say 12%. Your NBFC might say 14%. These numbers are real — but they are not what you actually pay.
Three additional layers inflate your true cost every single time:
Real Cost Breakdown on ₹10L @ 12% / 60 days
The effective APR is 5.8% higher than the quoted 12%. On ₹10L — that is ₹9,451 more than your lender's headline number implied.
Quoted Rate vs Effective APR (₹10L, 60 days)
RXIL TReDS
M1xchange TReDS
KredX
Drip Capital
Private NBFC
Effective APR calculated using standard formula including GST and platform fees. Research-based estimates — invoicefollowups.com, May 2026.
GST is not optional
Under GST classification, invoice discounting fees are taxable financial services. 18% GST applies to both the discount fee and the platform fee — always. No exceptions.
Uses the RBI-standard formula: Cost = Invoice × Rate × Days/365 + Platform Fee + 18% GST on all fees.
Enter your own quoted rate and platform fee.
Face value of the invoice(s) being discounted
Rate quoted by platform — before fees and GST
Days from advance to expected buyer payment
Charged as % of invoice value. TReDS: 0.10–0.25%. Private: 0.50–1.50%
% of invoice paid upfront. TReDS: up to 90%. NBFCs: 70–80%.
GST at 18% included automatically. Formula: Invoice × Rate × Days/365 + Platform Fee + 18% GST
Enter your invoice details to see the true all-in cost — not just the quoted rate.
By invoicefollowups.com Research Team · Last Updated: May 2026 · Data: TReDS platform disclosures, NBFC rate filings, RBI guidelines
Invoice discounting in India costs between ₹8,246 and ₹48,904 on a ₹10,00,000 invoice for 60 days — depending entirely on which platform you use. The cheapest option (RXIL TReDS at 9.5%) costs ₹8,246 less than the most expensive option (a private NBFC at 19%). That difference funds a full month of staff salaries for most MSMEs.
The invoice discounting cost formula used across all platforms in India is standardized by RBI for TReDS and disclosed in NBFC credit agreements:
Discount Fee = Invoice × (Rate ÷ 100) × (Days ÷ 365)
+ Platform Fee (% of invoice value)
+ GST at 18% on (Discount Fee + Platform Fee)
= Total True Cost
What platforms quote is only the first line. The GST and platform fee are not optional — they are applied on every single transaction, every time. Platforms that bury this in their terms and conditions are not doing anything illegal. But MSMEs who calculate their working capital needs based on the quoted rate end up with less cash than expected.
Cost Range (₹10L, 60 days)
₹14,200
effective 12.1% APR
₹15,180
effective 12.8% APR
₹27,040
effective 19.4% APR
₹48,904
effective 28.3% APR
Research estimates based on platform rate disclosures and RBI guidelines. invoicefollowups.com, May 2026.
Rate ranges sourced from platform rate disclosures, NBFC filings, and dealer interviews. May 2026.
MSME supplier + registered buyer on platform
7.5% – 11%
Annual discount rate
Platform Fee
0.10% – 0.20%
of invoice value
Max Advance
Up to 90%
of invoice face value
GST on fees
18% always
on discount + platform fee
MSME + large corporate / PSU buyer
8.0% – 12%
Annual discount rate
Platform Fee
0.15% – 0.25%
of invoice value
Max Advance
Up to 90%
of invoice face value
GST on fees
18% always
on discount + platform fee
Registered MSME. SIDBI promoted.
8.5% – 13%
Annual discount rate
Platform Fee
0.20% – 0.25%
of invoice value
Max Advance
Up to 90%
of invoice face value
GST on fees
18% always
on discount + platform fee
GST registered. Min ₹5L invoice.
12% – 18%
Annual discount rate
Platform Fee
0.40% – 0.60%
of invoice value
Max Advance
75% – 85%
of invoice face value
GST on fees
18% always
on discount + platform fee
Export invoices only. Overseas buyers.
13% – 18%
Annual discount rate
Platform Fee
0.40% – 0.60%
of invoice value
Max Advance
80% – 90%
of invoice face value
GST on fees
18% always
on discount + platform fee
Flexible. Collateral may be required.
16% – 24%
Annual discount rate
Platform Fee
0.75% – 1.50%
of invoice value
Max Advance
70% – 80%
of invoice face value
GST on fees
18% always
on discount + platform fee
Source: RXIL, M1xchange, Invoicemart platform disclosures. KredX and Drip Capital rate pages (accessed May 2026). NBFC range based on RBI MSME lending data. Rates vary by buyer creditworthiness, invoice tenure, and MSME credit profile.
On a ₹10,00,000 invoice, these six charges are applied in addition to the quoted discount rate. Most platforms do not show them upfront.
Adds ₹1,782 on a ₹10L invoice at 12% for 45 days
ALL platforms — mandatory
0.1% (TReDS) to 1.5% (NBFCs) of invoice value
All platforms — often not shown in quoted rate
₹500 – ₹2,000 per invoice on private platforms
KredX, Drip Capital, NBFCs
2% – 3% extra per month on recourse facilities
All private platforms (recourse structure)
₹5,000 – ₹15,000/month if you discount below threshold
Some NBFCs and private platforms
10% – 25% of invoice held until buyer pays
All platforms — reduces real advance
How to use this calculator to spot hidden fees
When a platform quotes you a rate, enter it above with their platform fee and advance rate. If the effective APR the calculator shows is significantly higher than what the platform implied, you've found a cost they didn't mention. The gap is almost always GST plus a platform fee that was disclosed in footnotes but not the headline.
Exact comparison on ₹10,00,000 for 60 days. Both calculations include all fees.
₹14,200
total cost, 60 days
₹27,040
total cost, 60 days
₹41,370
interest + 1.5% processing fee
When invoice discounting beats a business loan — and when it doesn't
Invoice Discounting Wins If:
Business Loan Wins If:
Scenario: Pune-based auto parts manufacturer. Invoice on Tata Motors (PSU buyer eligible for TReDS). Invoice value ₹10,00,000. Expected payment in 60 days. Using RXIL TReDS at 9.5%.
Calculate discount fee
₹10,00,000 × 9.5% × 60/365 = ₹15,616
This is the core interest cost — not the total cost
Add platform fee
₹10,00,000 × 0.20% = ₹2,000
RXIL platform fee. Charged upfront on transaction
Calculate GST on all fees
(₹15,616 + ₹2,000) × 18% = ₹3,171
Mandatory. Applied to discount fee + platform fee combined
Total cost
₹15,616 + ₹2,000 + ₹3,171 = ₹20,787
This is your actual all-in cost — 2.08% of invoice value
Cash received today (90% advance)
₹9,00,000 − ₹20,787 = ₹8,79,213
Deposited within 24–48 hours of buyer approval on TReDS
Remainder on buyer payment
₹10,00,000 − ₹9,00,000 = ₹1,00,000
Released when buyer pays the invoice on day 60
Final Summary — ₹10L RXIL TReDS
TReDS is 50% cheaper than a private NBFC
The same ₹10L invoice at 19% via a private NBFC costs ₹48,904 — a difference of ₹28,117 for the same invoice, same 60 days.
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TReDS offers the lowest invoice discounting rates in India (7.5–11%). Answer 6 questions to find out if your business qualifies and which platform suits you.
Methodology & Data Attribution
Discount Fee Formula: Invoice Amount × (Annual Rate ÷ 100) × (Days ÷ 365). Standard RBI-referenced formula used across TReDS platforms and NBFC credit agreements in India.
GST Treatment: 18% GST applied to total of discount fee and platform fee. Invoice discounting services are classified as taxable financial services under GST (SAC 997119). Mandatory on all transactions.
Effective APR Formula: (Total Cost ÷ Cash Received) × (365 ÷ Days) × 100. Reflects true annualized cost of the advance received — not the face value of the invoice.
Rate Data Sources: RXIL, M1xchange, Invoicemart platform rate disclosures (accessed May 2026). KredX and Drip Capital pricing pages. Private NBFC rate ranges sourced from RBI MSME lending statistics and dealer interviews.
Data Collected By: invoicefollowups.com Research Team
Last Updated: May 2026
Disclaimer: Rates and fees are research-based estimates. Actual rates depend on buyer creditworthiness, invoice tenure, MSME financial profile, and platform-specific terms. Not financial advice.
References: RBI.org.in ↗, RXIL.in ↗, M1xchange.com ↗, MSME.gov.in ↗