Service Tax as per Budget for Credit Card, Debit Card and Charge Card Services

Rate of Service Tax changes under Budget 2017-18 for Credit Card, Debit Card and Charge Card Services


Service Tax as per Budget for Credit Card, Debit Card and Charge Card ServicesIn continuation of demonetization in the country since November 2017 and implementation of GST before September 2017, Indian Budget 2017-18 is being announced on 1st February 2017.

As Service Tax is being transitioned to GST this year, major changes are expected in Indian Budget 2017-18.  The service tax rate changes for Credit Card, Debit Card and Charge Card Services under Indian Budget 2017-18 is being updated below soon after announcement of Budget on 1st February, 2017. The government notification extract also is being updated in pdf format once after release from the authorities.

Click here to read government notification on changes in Service Tax tariff rate under Indian Budget 2017-18 


Customs duty tariff rate changes as per Indian Budget 2017-18

Central Excise Duty changes as per Indian Budget 2017-18

Service Tax rate Changes under Indian Budget 2017-18











Relief to the armed forces of the Union from service tax



Services provided or agreed to be provided by the Army, Naval and Air Force Group Insurance Funds by way of life insurance to members of the Army, Navy and Air Force under the Group Insurance Schemes of the Central Government is being exempted from service tax from 10th September, 2004 (the date when the services of life insurance became taxable).




Dispute resolution, certainty of taxation  and avoidance of  litigation



Notification No. 41/2016-ST dated 22.09.2016, which has exempted from service tax, one time upfront amount (called as premium, salami, cost, price, development charges or by whatever name) payable for grant of long-term lease of industrial plots (30 years or more) by State Government industrial development corporations/undertakings to industrial units, is proposed to be made effective from 1.6.2007 (the date when the services of renting of immovable property became taxable).





Rule 2A of the Service Tax (Determination of Value) Rules, 2006 is proposed to be amended from 01.07.2010 so as to make it clear that value of service portion in execution of works contract involving transfer of goods and land or undivided share of land, as the case may be, shall not include value of property in such land or undivided share of land.




Promotion of Regional Connectivity  Scheme of Ministry of Civil Aviation



Under the Regional Connectivity Scheme (RCS), exemption from service tax is being provided in respect of the amount of viability gap funding (VGF) payable to the airline operator for providing the services of transport of passengers by air, embarking from or terminating in a Regional Connectivity Scheme (RCS) airport, for a period of one year from the date of commencement of operations of the Regional Connectivity Scheme (RCS) airport as notified by Ministry of Civil Aviation.




Rationalization Measures



The exemption in respect of services provided by Indian Institutes of Management (IIMs) by way of two year full time residential Post Graduate Programmes (PGP) in Management for the Post Graduate Diploma in Management (PGDM), to which admissions are made on the basis of the Common Admission Test (CAT), conducted by IIMs, is being extended to include non-residential programmes.





Explanation-I (e) to Rule 6 of CENVAT Credit Rules, 2004 is being amended so as to exclude banks and financial institutions including non-banking financial companies engaged in providing services by way of extending deposits, loans or advances from its ambit.



The Negative List entry in respect  of “services by way of carrying out any process amounting to manufacture or production of goods excluding alcoholic liquor for human consumption”, in the Finance Act, 1994, is proposed to be omitted and instead placed in the exemption notification. Consequently, clause (40) of section 65B of the Finance Act, which defines ‘process amounting to manufacture’ is also proposed to be omitted and instead placed in the exemption notification.








Amendments not affecting rates of duty


The following amendments are being carried out to:

(i)          Delete tariff items 1302 32 10 and 1302 32 20 and entries relating thereto and create new tariff items 1106 10 10 and 1106 10 90, in relation to Guar meal and its products so as to harmonize the Customs Tariff with HS Nomenclature.

(ii)        Create new tariff item 1511 90 30 for Refined bleached deodorized palm stearin, so as to harmonize Customs Tariff in accordance with WCO classification decision.

(iii)      Substitute tariff items 3823 11 11 to 3823 11 90 and entries relating thereto with tariff item 3823 11 00.

(iv)      Substitute tariff items 3904 10 10 to 3904 22 90 with tariff items 3904 10 10 to 3904 22 00 in relation to the PVC Resin.


Chapter Note (4) of Chapter 98 is being amended so as to remove the non-applicability of headings 9803 and 9804 to goods imported through courier service. Also, heading 9804 is being amended so as to extend the classification of personal imports by courier, sea, or land under this heading.




Credit Card, Debit Card and Charge Card Services fall under SAC 00440394


The Law about Service Tax for Credit Card, Debit Card and Charge Card Services explains:

"Credit Card, Debit Card, Charge Card or Other Payment Card Service" includes any service provided,-

(i) by a banking company, financial institution including non-banking financial company or any other person (hereinafter referred to as the issuing bank), issuing such card to a card holder;

(ii) by any person to an issuing bank in relation to such card business, including receipt and processing of application, transfer of embossing data to issuing bank's personalisation agency, automated teller machine personal identification number generation, renewal or replacement of card, change of address, enhancement of credit limit, payment updation and statement generation;


(iii) by any person, including an issuing bank and an acquiring bank, to any other person in relation to settlement of any amount transacted through such card.


Explanation -For the purposes of this sub-clause, "acquiring bank" means any banking company, financial institution including non-banking financial company or any other person, who makes the payment to any person who accepts such card;


(iv) in relation to joint promotional cards or affinity cards or co-branded cards;


(v) in relation to promotion and marketing of goods and services through such card;


(vi) by a person, to an issuing bank or the holder of such card, for making use of automated teller machines of such person; and


(vii) by the owner of trademarks or brand name to the issuing bank under an agreement, for use of the trade mark or brand name and other services in relation to such card, whether or not such owner is a club or association and the issuing bank is a member of such club or association.


Explanation - For the purposes of this sub-clause, an issuing bank and the owner of trade marks or brand name shall be treated as separate persons;

(Section 65(33a) of the Finance Act, 1994)


"Taxable Service" means any service provided or to be provided to any person, by any other person, in relation to credit card, debit card, charge card or other payment card service, in any manner;



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What is the service tax rate for Credit Card Services as per Budget?


ST tariff rate changes for Debit Card Services under SAC   00440394


Budget 2017-18, Service Tax to be paid for Charge Card Services


payment card related services, Service Tax tariff rate changes in Budget, SAC  00440394


How much Service Tax to be paid for Credit Card and Payment Card Services as per latest changes in Budget?


Hardik modi: Pls inform me I use 1 lac on credit card so what will be my bill payment after GST IS 18% pls inform me pls contact me on

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