Punjab National Bank Vs Commissioner of Service Tax (CESTAT Chandigarh)
CESTAT Chandigarh held that banking services provided by Nationalized Bank to Reserve Bank of India are exempted from levy of service tax. Accordingly, service tax not leviable.
Facts- The appellant is a Nationalized Bank having its registered office in Chandigarh and was registered with the Service Tax department for providing taxable services in the category of Banking and Financial Services, Transportation of goods by road and Renting of immovable property dated 16.04.2009 as defined u/s. 65(105)(zzk) 65(105) (zzp), 65(105) (zzzz) of the Finance Act, 1994. That the Reserve Bank of India (RBI) through a network of its public Accounts Departments and branches of other Agency Banks (appointed under Section 45 of the RBI Act) carries out Govt. transaction for the Central and State Government. The Appellant is an Authorized Branch of Punjab National Bank (PNB) that carries out Central & State government transactions for States of Punjab, Haryana & Himachal Pradesh.
Appellant was a link branch for Punjab National Bank (PNB), serving branches in Punjab, Haryana, and Himachal Pradesh in relation to government transactions. These branches send summaries of daily transactions to the link branch, which PNB used to credit or debit the branch accounts accordingly. Further, these summaries were consolidated into a single figure on a quarterly basis and reported to the RBI. RBI credited the Appellants’ account with the commission earned, out of the total commission received, Appellant retained 25% (approx.) and transfer the remaining 75% (approx.) to the respective branches.
