HIGH COURT OF CALCUTTA: Ramesh Kumar Patodia v. Citi Bank [WPO NO. 547 OF 2019 JUNE 24, 2022 ]
Facts:
♦ Petitioner is a holder of a valid Citi Bank Credit Card issued by the respondent no. 1/Bank. He was granted an instant loan by the Bank at a specified rate of interest above the credit limit. The loan on his credit card is disbursed and is repayable in Equated Monthly Instalments [EMIs] along with an additional initial interest amount.
♦ The petitioner detected that IGST @ 18% was charged on the initial interest as well as interest component of EMI.
♦ The petitioner raised objection against charging of IGST on the initial interest as well as interest component of EMIs by the bank & filed the writ petition.
Judgement:
The writ petition filed by the petitioner was dismissed by the Hon’ble Court based on the following grounds:-
√ It is evident from the offer of loan that the same was not an offer to all intending borrowers but was restricted to a particular category of persons holding the Citi Bank Credit Card.
√ The criteria for processing the loan, the manner in which the EMI of loan is reflected in the Credit Card statements & the charging of interest in case there is a shortfall in the payment of the amount due as well as the mode of payment all goes to prove that the service rendered by the Bank in extending the loan in question is nothing but a service pertaining to the said credit card.
√ The expression “other than interest involved in credit card services” appearing under Serial No. 28 of notification no. 9/2017-IGST (R) dt 28.06.2017. carves out an exception by excluding the interest on credit card services from the purview of the said exemption notification.
√ The services rendered by the bank by way of extending loans to the petitioner in the instant case amounts to credit card services, the interest component of EMI of the said loan is nothing but interest involved in credit card services which is not exempted by notification no. 9/2017-IGST (R) dt 28.06.2017.
