Order Date – 25 January 2023

Parties: CST – Bangalore Vs Canara Bank

Facts – 

• The Respondent, Canara Bank, had received commission from the Reserve Bank of India for rendering certain services were classifiable as banking or financial services under Section 65 (12).

Issue –

• Whether the respondent is eligible to claim exemption under notification 22/2006-ST dated 31.03.2006, on the commission received from the Reserve Bank of India?

Order –

• The divisional bench of Hon’ble Supreme Court observed that the Tribunal relying the decision of this court in the case of State of Madras vs.  Cement Allocation Coordinating Organisations, 1971 (2) SCC 587 held that the services rendered by the Scheduled Banks as statutory agent under Section 45 of the Reserve Bank of India Act, 1934 and also the other activities of the Scheduled Banks involving statutory functions on behalf of the Reserve Bank of India, were not taxable with regard to the terms of the notification.
• Hence it was held that so far as scheduled banks perform activities as statutory agent of the Reserve Bank of India under Section 45 of the Reserve Bank of India Act, 1934 are concerned do not call for any interference. The appeals are accordingly dismissed.
  
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