AMERICAN EXPRESS BANK LIMITED Vs. CST

JUDGEMENT

(1.) HEARD both sides on the stay petition.

(2.) The applicant is a banking institution who inter alia, provides credit card services. The credit card services became taxable w.e.f. 16.7.2001. The applicant is paying service tax on various charges collected by them from card holders under the category of "credit card services" coming under the overall service "banking and other financial services".

(3.) BY its nature, the credit card services are triangular in nature, involving the card holders, the banking institution and various establishments which are selling goods or providing services. The banks also collect separately from the Merchant Establishments or retain part of the amount collected from the card holders towards whatever services rendered by them to the merchant establishments.