Interim relief granted to ICICI Bank; show cause notice to be adjudicated without final order implementation
In a significant interim order, the Delhi High Court has restrained the implementation of final orders concerning the Goods and Services Tax (GST) on charges levied by banks, including ICICI Bank, for the non-maintenance of a minimum average balance by customers. The decision comes amid a larger debate on the taxability of services related to bank facilities such as cheque books provided for a consideration.
In the case titled ICICI Bank Limited v. Union of India, the Division Bench comprising Justices Prathiba M. Singh and Renu Bhatnagar examined the Show Cause Notice (SCN) issued on September 19, 2025, by the Principal Commissioner of CGST & CX, Mumbai, East. The notice demanded justification for not treating the charges levied by banks as taxable supplies under GST, arguing that these charges represent valuable services provided to customers.
The court acknowledged the principal issue as whether taxable supplies arise from charges imposed on customers who fail to maintain the stipulated minimum average balance. The Revenue Department contends these charges are for facilities deemed valuable and provided for a consideration, thus attracting GST.
The Bench referenced previous petitions, notably ICICI Bank Limited v. Union of India & Ors. and Punjab National Bank & Ors. v. Union of India & Ors., which raised similar issues. The court decided to align the hearing date of this petition with the batch of petitions set for February 27, 2024.
Pending the adjudication of the SCN, the High Court has directed that while the notice can be adjudicated, any final orders emanating from the adjudication process shall not be implemented until further orders. This interim relief provides a temporary reprieve to the banks involved, including ICICI Bank, as they navigate the complexities of GST compliance concerning banking charges.
The matter has been scheduled for further hearing on February 10, 2026, where the court is expected to delve deeper into the merits of the case and the implications of such charges under the GST framework.
Bottom Line:
The principal issue pertains to the imposition of taxable supplies by the Revenue, based on charges levied by banks on customers for non-maintenance of minimum average balance and the associated facilities provided, such as cheque books, indicating these as taxable services.
Statutory provision(s): Article 226 of the Constitution of India, Goods and Services Tax (GST) provisions.
ICICI Bank Limited v. Union of India, (Delhi)(DB) : Law Finder Doc Id # 2825952
