NDLI: Commissioner of Gst and Central Excise Vs. M/s Citi Bank N. A.

Content Provider	Supreme Court of India
e-ISSN	30484839
Language	English
Access Restriction	NDLI
Subject Keyword	1944 Central Excise Act
Content Type	Text
Resource Type	Law Judgement
Jurisdiction	India
Act(s) Referred	Central Excise Act, 1944 (1 of 1944)
Case(s) Referred	Referred Case 0 Referred Case 1 Referred Case 2 Referred Case 3 Referred Case 4 Referred Case 5 Referred Case 6
Case Type	Appeal
Court	Supreme Court of India
Disposal Nature	Matter Referred to Larger Bench
Headnote	Central Excise Act, 1944 - ss. 35L(1)(b) – Finance Act, 1994 – 65B(44), 65(33a), 67, 68 – Service Tax on interchange Fee – An internal audit group of the Service Tax Commissionerate found that respondent-bank was receiving interchange fee, which formed part of the gross amount billed to the customer – Show Cause Notices were issued to the Respondent – Respondent contended that it is not performing any service so as to render it exigible to service tax on the interchange service – Principal Commissioner found that respondent-bank was liable to pay service tax, penalty and interest on the amount of “interchange fee” received by it – The Tribunal set aside the order passed by the Principal Commissioner – On appeal, held: Per K. M. Joseph, J.,: The respondent, as issuing bank, was liable to pay service tax, u/s.68(1), being the service provider – Being liable to pay tax u/s.68(1), it was also liable to file the return including the amount of interchange fee – The measure of tax, which is found in s.67(1)(i), is entirely related to the service that the acquiring bank provided and agreed to provide – Likewise, the value of the service provided by the issuing bank, would be the value of service, for the purpose of s.67(1) – Therefore, respondent- bank was liable to include interchange fee and file return and pay tax on the same – It is also clear that Respondent, as issuing bank, provides service within the meaning of s.65(33a)(iii) – Respondent is paid Rs.2 as interchange fee – Interchange fee, therefore, is exigible to service tax – Per S. Ravindra Bhat, J. (dissenting):Respondent-bank, as issuing bank was providing service, as found by the Commissioner – However, this service was a part of a single unified service – of settling transactions – Which is provided by both the acquiring and issuing bank – Having characterized the service to be a single unified service – wherein service tax, by way of business convenience, is collected from/ remitted by the acquiring bank on the value (whole MDR which includes the interchange fee that is retained by the issuing bank) taxable for single service rendered by both the acquiring and issuing bank (respondent) cannot be called upon to pay service tax again as this would result in double taxation.
Judge	Hon'ble Mr. Justice K.M. Joseph
Neutral Citation	2021 INSC 857
Petitioner	Commissioner Of Gst And Central Excise
Respondent	M/s Citi Bank N. A.
SCR	[2021] 13 S.C.R. 424
Judgement Date	2021-12-09
Case Number	8228

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Commissioner of Gst and Central Excise Vs. M/s Citi Bank N. A.

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