Hi,
I recently had unpleasant experience with HDFC Bank. While I was charged wrongly for a credit card bill payment not done, they have reversed that charge, but GST on charge is not reversed with following statement in their email. My concern is, when there is no charges at all, how does the GST exists? I had ICICI reversing my GST along with the transaction amount as well, but HDFC says it differently.
"As per the current Finance Bill, all fees and transaction charges, levied in your card account, will attract a rate of GST @ 18%. In terms of these guidelines provided by the Finance Bill, the Bank will be levying the GST accordingly. Effective July 01, 2017 service tax rate of 15% is replaced by Goods & Service Tax (GST) at 18% and thereby like to confirm that GST component once charged will not be liable for any reversal . GST is government initiated item and a government guideline on taxes, as a bank we are abiding by it"
4 Replies
CA Altamush Zafar
(GST Consultant)
(15971 Points)
Replied 27 May 2019
This is also a view and it is correct to some extent. But where charges were levied wrongly then GST should have been reversed. But there will be little you could do about it since it is the bank's policy.
Rajesh Binani
(21 Points)
Replied 07 June 2019
Thank you Mr.Zafar. I thought to pursue the issue with higher management (MD office) at HDFC Bank. After asking them to provide the abstract proof of what they were referring to in Finance Bill of 2018, below was their response.
"We note that you have certain reservations regarding the Goods and Service taxes levied in your card account. On receipt of your e-mail, our Service Manager, Mr. Lakshmikanth has personally contacted you and clarified your query. As informed earlier, we wish to re-confirm that we have arranged to reverse the Goods and Service taxes levied towards the above bank charges."
So I firmly believe that reversal of taxes should also happen as even banks get ITCs. This is just another loophole the banks have found to ride uninformed and gullible customers. While many other banks diligently reverse the GST along with service charges, banks like HDFC have not followed this ethically, until they are prompted for valid proofs.
"We note that you have certain reservations regarding the Goods and Service taxes levied in your card account. On receipt of your e-mail, our Service Manager, Mr. Lakshmikanth has personally contacted you and clarified your query. As informed earlier, we wish to re-confirm that we have arranged to reverse the Goods and Service taxes levied towards the above bank charges."
So I firmly believe that reversal of taxes should also happen as even banks get ITCs. This is just another loophole the banks have found to ride uninformed and gullible customers. While many other banks diligently reverse the GST along with service charges, banks like HDFC have not followed this ethically, until they are prompted for valid proofs.
CA Sarveshwar Sharma
(2 Points)
Replied 20 April 2021
I also had the same experience now with HDFC Bank. It seems they are cheating customers by not reversing the GST even after reversal of the charges on which it was originally levied.
Anjana Deshmukh
(2 Points)
Replied 22 March 2023
I also have the same issue with my HDFC credit card, they are not reversing the GST charges. Even I fail to understand when there is no charge, how can GST be levied. I have decided to cancel this credit card. Also HDFC gives credit card under the false pretext that its lifetime free from annual charge. Then they charge annual fees which is so high-Rs. 2500. When you complain they reverse the charge but not the GST which is Rs 450 on 2500. This is outright cheating! I don't need their card!
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