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(i) whether the appellants banks in India are the recipient of service, in export/import transaction involving transfer/ exchange of documents and transfer of money on behalf of their client exporters/importers or otherwise;

(ii) whether the appellants banks in India are liable to pay service tax on 'bank charges' deducted/charged byforeign banks or foreign banks through correspondent/intermediary banks, under Reverse Charge Mechanism?

8.1 We find that on the aforesaid issue of liability to pay service tax on 'foreign bank charges', both during pre-negative list period and post 0.07.2012 have been examined in detail by the Co-ordinate Bench of this Tribunal in the case of State Bank of Bikaner & Jaipur (supra), wherein it was held that the banks in India are not the recipient of any service rendered by foreign banks in the export/import transaction for settling the foreign remittances, and there is no liability of payment of service tax thereon on Reverse Charge Mechanism (RCM) basis. The relevant paragraphs of the said Order of Tribunal dated 05.08.2020 is extracted and given below:

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19. As noticed above, the issue that needs to be decided is whether the Foreign Banks have provided any service of transfer/exchange of documents and transfer of money relating to exports made by the exporters in India, who receive money through the Appellant Bank against the said exports. According to the Department, the Foreign Bank provides "banking and other financial services", as defined under Section 65(12) of the Finance Act, which is taxable under Section 65(105)(zm) of the Finance Act at the hands of the Appellants under a reverse charge ST/85423/2017, ST/86862/2017 & ST/86244/2019 mechanism. The contention of the Appellant Bank is that no service has been provided by the Foreign Bank or the Foreign Intermediary Bank to the Appellant Bank and, therefore, the Appellant Bank cannot be asked to pay service tax on reverse charge mechanism and in any case there is no flow of consideration from the Appellant Bank to the Foreign Bank or the Foreign Intermediary Bank so as to make the alleged service to the Appellant Bank taxable.

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34. The issue that needs to be decided is whether the Appellant Bank is the recipient of the service said to have been provided by the Foreign Bank. The nature of the transactions that take place when an exporter in India exports goods to an importer outside India has been described in the preceding paragraphs. The Appellant Bank provides service to the exporters by sending the export documents to the bank of the importer abroad and collects payment. Thus, the role of the Appellant Bank is to settle the payment relating to export/import of trade. For performance of such activity, the Appellant Bank charges service tax to the exporters and there is no dispute about the said charges in this Appeal. The Appellant Bank cannot be said to be the recipient of service for the activities undertaken by the Foreign Banks situated outside India, the charges for which are deducted at source on the export bill. The Appellant Bank merely acts on behalf of the Indian exporter and facilitates the service. The Appellant Bank, therefore, would not be liable to pay service tax under the reverse charge mechanism.

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50. The inevitable conclusion that follows from the above discussion is that the Indian Bank is not the recipient of any service rendered by the Foreign Bank and, therefore, there is no liability to pay service tax on a reverse charge mechanism."

8.2 We also find that Co-ordinate Bench of the Tribunal in the case of Central Bank of India (supra) in Final Order No. 59933/2024 dated 10.12.2024 in dismissing the appeal filed by the department against the relief given in favour of the appellants have relied upon the case of State Bank of Bikaner & Jaipur and held that banks in India are not liable to pay service tax under RCM basis in respect of export/import transactions conducted on behalf of their client exporters.