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TMI Blog2014 (11) TMI 334X X X X Extracts X X X X X X X X Extracts X X X X ..... reality providing a service to the card holder and the merchant establishment. The Issuing Bank is only providing service to the card holders to confirm their eligibility for credit which cannot be said to be a service to the merchant establishment or to the Acquiring Bank. service received or provided by an Issuing Bank or an Acquiring Bank in the kind of transaction is not covered in any of the clauses of definition of service. In such a situation, the taxability itself is in doubt. - sharing of the commission between the Acquiring Bank and the Issuing Bank cannot be considered as service transaction but as sharing of income between two service providers. - Stay granted. - ST/26949/2013 - Misc. Order No. 21266/2014 - Dated:- 26-5-2014 - ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... shared between the Bank who has issued the card (called as issuing bank) and also with the Card Agency such as VISA / Master. This share is called the Interchange Fee. The appellant-bank has issued Credit card to its customers. These cards are swiped in other banks' MEs. As an issuing bank, a share of discount earned by these banks is passed on to the appellant bank. However, the service tax on the gross discount has been discharged by the other banks. The appellant-bank had received only a share of discount called as Interchange fee which has already suffered service tax. 2. On the ground that the appellant should have paid service tax on the Interchange commission earned by them, proceedings were initiated which has resulte ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... interchange reimbursement fee or commission is a part of commission collected from Merchant Establishment) paid to VISA / Master Card under reverse charge mechanism in terms of Section 66A of the Finance Act, 1994 whereas when act as an issuing bank contends that the interchange reimbursement fee or commission (which is again a part of commission collected from Merchant Establishment) received from the acquiring bank is not liable to service tax at the hands of the issuing bank since on the entire commission the acquiring bank had already discharged the service tax liability. In view of the above, the contentions of M/s Vijaya Bank in this regard are not acceptable . In our opinion, comparison with the payment of service tax under revers ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ludes any service provided, - (i) By a banking company, financial institution including non-banking financial company or any other person (hereinafter referred to as the issuing bank), issuing such card to a card holder; (ii) By any person to an issuing bank in relation to such card business, including receipt and processing of application, transfer of embossing data to issuing bank's personalisation agency, automated teller machine personal identification number generation, renewal or replacement of card, change of address, enhancement of credit limit, payment updation and statement generation; (iii) By any person, including an issuing bank and an acquiring bank, to any other person in relation to settlement of any ..... X X X X Extracts X X X X X X X X Extracts X X X X
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