2015 (8) TMI 686 - CESTAT DELHI (LB)

Credit Card Services - On and from 01-05-2006 credit card services was deleted from BOFS and incorporated into a distinct service - scope of the ‘Banking and Other Financial Services’ (BOFS) as introduced w.e.f 16-07-2001 - Held that:- introduction of a comprehensive definition of “credit card, debit card, charge card or other payment service” in Section 65(33a) read with Section 65(105) (zzzw), by the Finance Act, 2006 is a substantive legislative exertion which enacts levy on the several transactions enumerated in sub-clauses (i) to (vii) specified in the definition set out in Section 65(33a); and all these transactions are neither impliedly covered nor inherently subsumed within the purview of credit card services defined in Section 65(10) or (12) as part of the BOFS;

Whether the levy is retrospective - Held that:- Section 65(33a) is neither intended nor expressed to have a retroactive reach i.e. w.e.f. 16.07.2001. Services enumerated in these sub-clauses are not implicit in the scope of credit card services;

Scope of the term Customer - merchants/merchant establishments’ (ME) - Held that:- Held that:- a Merchant/ Merchant Establishment is “a customer” in the context of credit card services enumerated in Section 65(72)(zm), subsequently Section 65(105)(zm) and a fortiori an acquiring bank is “a customer” of an issuing bank.

Scope of the term “in relation to” - Merchant Establishment Discount - Held that:- ME discount, by whatever name called, representing amounts retained by an acquiring bank from out of amounts recovered by such bank for settlement of payments to the ME does not amount to consideration received “in relation to” credit card services.