Case Details: ICICI Bank Ltd. vs. Commissioner of Service Tax, Mumbai-I (2026) 43 Centax 60 (Tri.-Bom)
Judiciary and Counsel Details
-
- S/Shri S.K. Mohanty, Member (J) & M.M. Parthiban, Member (T)
- S/Shri V. Sridharan, Sr. Advocate a/w Jay Chheda & Aniket Barve, Advocates, for the Appellant.
- Shri Manish Mohan, Commissioner, Authorized Representative, for the Respondent.
Facts of the Case
The appellant-assessee, an Indian bank, processed import/export documents and remittances on behalf of its client-exporters and importers. The Department treated the assessee as the recipient of services rendered by foreign banks in respect of foreign bank charges deducted or charged in export/import transactions and demanded Service Tax under the Reverse Charge Mechanism. The assessee contended that the foreign bank charges were recovered by foreign banks in the course of remittance transactions and that it was not the recipient of any service from such banks. The matter was accordingly placed before the Customs, Excise and Service Tax Appellate Tribunal (CESTAT).
CESTAT Held
The CESTAT held that Section 65(105)(zm), read with Sections 65(12), 68, and 73 of the Finance Act, 1994, did not impose Service Tax liability on the assessee under the Reverse Charge Mechanism in respect of foreign bank charges. The Tribunal observed that the documentary trail relating to the Letter of Credit established that the assessee had no role in the payment of foreign bank charges and was not the recipient of any services rendered by the foreign banks. It held that no Service Tax was payable by Indian banks under the Reverse Charge Mechanism on such charges and, accordingly, set aside the demand.
List of Cases Cited
-
- Bank of Baroda v. Commissioner — Final Order No. A/86227/2025, dated 8-8-2025 by CESTAT, Mumbai — Referred[Para 4.1]
- BGR Energy Systems Ltd. v. Additional Commissioner — 2020 (32) G.S.T.L. 186 (Mad.) — Followed [Paras 9.2, 10]
- Commissioner v. Central Bank of India — 2025 (1) TMI 538-CESTAT New Delhi — Noted [Paras 4.1, 8.2]
- HDFC Bank Ltd. v. Commissioner — (2024) 15 Centax 281 (Tri.-Bom) — Referred [Para 4.1]
- State Bank of Bikaner & Jaipur v. Commissioner — 2021 (45) G.S.T.L. 293 (Tri.-Del) — Followed [Paras 4.1, 8.1, 8.2, 10]
List of Departmental Clarifications Cited
-
- RBI Master Circular No. 7/2011-12, dated 1-7-2011 [Para 4.3]
List of Notifications Cited
-
- Notification No. 30/2012-S.T., dated 20-6-2012 [Para 3.4]
