📰 𝗖𝗮𝗹𝗰𝘂𝘁𝘁𝗮 𝗛𝗶𝗴𝗵 𝗖𝗼𝘂𝗿𝘁 𝗥𝘂𝗹𝗶𝗻𝗴: 𝗜𝗚𝗦𝗧 𝗡𝗼𝘁 𝗔𝗽𝗽𝗹𝗶𝗰𝗮𝗯𝗹𝗲 𝗼𝗻 𝗜𝗻𝘁𝗲𝗿𝗲𝘀𝘁 𝗳𝗼𝗿 𝗖𝗿𝗲𝗱𝗶𝘁 𝗖𝗮𝗿𝗱 𝗟𝗼𝗮𝗻

📢 Court’s Statement: "The interest component on EMIs for credit card loans does not constitute 'credit card services' and is therefore exempt from IGST."

🔍 𝗙𝗮𝗰𝘁𝘀: • 𝗖𝗮𝘀𝗲 𝗧𝗶𝘁𝗹𝗲: Ramesh Kumar Patodia vs City Bank N.A. • 𝗖𝗼𝘂𝗿𝘁: Calcutta High Court • 𝗗𝗮𝘁𝗲: 25-Jul-2023

𝗜𝘀𝘀𝘂𝗲: Mr. Patodia, a credit card holder with Citibank, challenged the levy of IGST on the interest charged on a ₹6,50,000 loan, arguing that this interest did not fall under "credit card services" for IGST purposes. Citibank had added IGST on the interest for each EMI, treating it as part of the credit card’s services.

𝗣𝗿𝗼𝗰𝗲𝗲𝗱𝗶𝗻𝗴𝘀: Representing himself, Mr. Patodia argued that the loan and its interest were distinct from credit card services, which are generally subject to IGST. He cited exemptions under relevant Finance Act provisions and IGST notifications.

⚖ 𝗝𝘂𝗱𝗴𝗺𝗲𝗻𝘁: The Calcutta High Court ruled in favor of Mr. Patodia, declaring that the interest portion of the EMIs was exempt from IGST. The court ordered Citibank to refund the IGST collected on these interest payments, affirming that the loan was a separate transaction and did not fall within the taxable "credit card services" category.

📜 𝗜𝗺𝗽𝗹𝗶𝗰𝗮𝘁𝗶𝗼𝗻𝘀: This decision clarifies that IGST is not applicable to interest on loans taken through credit cards if such loans are independent transactions. It reinforces the requirement for banks to differentiate between loan-related services and standard credit card services in GST assessments. Team GSTpanacea 7503031378