2026-VIL-832-CESTAT-CHD-ST
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SERVICE TAX CESTAT Cases

Service Tax - Taxability of cash incentives provided by banks to credit card users - Department sought to levy service tax on the cash incentives accruing to the Respondent-Assessee on usage of the commercial credit card provided by the banks, contending that the activity undertaken by the respondent assessee amounts to a taxable service in terms of Section 65(E)(e) of the Finance Act, 1994 - The respondent assessee submitted that there is no service involved and they are merely a recipient of the credit card service from the bank, using the card for their business transactions, and the cash back incentives are not a consideration for any service – HELD - The use of the commercial credit card by the respondent assessee is merely for promoting their own business and not the business of the banks. No service is being rendered by the respondent assessee to the banks - As per the Circular No. 214/1/2023-S.T. dated 28.02.2023, the activities contemplated under Section 66E(e) require an agreement between the parties with a flow of consideration, which is not present in this case. The appellant revenue department had invoked Section 66E(e) for the first time in the grounds of appeal, which was not part of the show cause notice. An order or appeal cannot travel beyond the scope of the show cause notice - The service tax is payable only if the conditions mentioned in Section 67 are satisfied, i.e., the amount charged should be for the service provided and have a nexus with the taxable service. Accordingly, the impugned order is sustained and the Revenue appeal is dismissed
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GSTAT Appeal filed wrongly...
By CA Vivek Jalan

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