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2015 (11) TMI 909 - AT - Service TaxDemand of service tax - Credit card services - Mark up charges - Held that:- The term ‘Credit Card Services’ was not defined during the impugned period. A new tax entry was introduced in 2006 under Section 65(12) as ‘Credit Card Services’ with much wider scope as defined under Section 65 (33a). The period relevant for the present appeal is prior to this new entry - when card is issued with international credit facility, service charges collected at that time or on periodical basis are subjected to service tax under credit card service. When such card is used to pay in foreign exchange outside India there will necessarily be a charge for conversion of currency. The card holder is settling his dues with appellant only in rupees. The card is used for payment in foreign exchange. As such the mark up charge is directly attributable to the conversion of currency. This much is clear from the terms of usage and the card holder is also aware of the nature of mark up. The case of Revenue is that since card is an instrument which only enables such conversion of currency, hence any mark up collected on this account is leviable to tax as credit card service. - mark up charges accruing to the appellant when card holder uses card to pay in foreign exchange abroad is not liable to service tax under ‘Credit Card Services’ during the impugned period. This conclusion is based both on merit of scope of ‘Credit Card Services’ during relevant period and lack of territorial jurisdiction of charge. - appellant is not liable to service tax on ‘interchange charges’ in view of the findings of the larger Bench of the Tribunal in Standard Chartered Bank (2015 (8) TMI 686 - CESTAT DELHI (LB)) - Decided in favour of asessee.
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