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of <h1>Interchange fee service tax liability on issuing banks overturned; demand, interest and penalty set aside on appeal</h1> Interchange fee charged by an issuing bank was examined as consideration for services and whether it attracted service tax; the tribunal precedent was ... Demand service tax on the interchange fees received by the appellant as issuing bank - Consideration for services rendered by issuing bank - Demand, interest and penalty - scheduled commercial bank - HELD THAT:- We find that the issue of levy of service tax on interchange fee collected by the issuing bank has been decided by the Tribunal, wherein it has been categorically held that the same does not attract service tax. Following the said decision, we are of the considered view that the demand cannot sustain and needs to be set aside which we hereby do. The appeal is allowed with consequential reliefs, if any. Issues: Whether interchange fees received by the issuing bank attract service tax.Analysis: The Tribunal examined whether the interchange fee charged to the issuing bank constitutes consideration for a taxable service liable to service tax with effect from 01.07.2012. The Tribunal relied on its earlier decision in the appellant's own case for an earlier period and applied that ruling to the facts before it, addressing the legal characterisation of interchange fees as not attracting service tax.Conclusion: The demand of service tax on interchange fees received by the issuing bank is set aside and the appeal is allowed in favour of the assessee.
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