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OthersArticle·25 August 2026

CESTAT says an interchange fee issued by the Banker cannot be taxed again

By J the App

Executive Summary

Can the Revenue separately tax the issuing bank on its share of interchange fee when service tax has already been paid on the entire MDR? CESTAT Mumbai says no, following the Supreme Court's final decision in Citi Bank. 

The Court held that MDR represents the consideration for the unified credit-card service and that separately taxing the interchange component would result in double taxation. The demands, interest and penalties against HDFC Bank were therefore set aside.

Domain | Indirect Tax | Regulatory | Service Tax | Credit Card Services | Interchange Fee 

The Positi...

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