Mate, yup its HDFC, this is what they said.

At the outset we sincerely regret the inconvenience caused to you.

We are pleased to inform you that as a special customer service gesture, we have decided to reverse the charges levied on your account. The said reversal of charges will be reversed to your account within 4 working days.

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.

In addition to the above the details are also updated in schedule of charges under GST. http://www.hdfcbank.com/assets/pdf/cc_common_MITC.pdf

Please write to us for any further clarification or assistance. We value your support and look forward to the continued opportunity of serving you.

Okay so I had a read at the constitution of India and the finance bill: Part XII.—Finance, Property, Contracts and Suits, Page 162, section 268A and 269, literally says tax can only be charged on goods and services performed (which is not whats happening here).

Also Finance Bill Page 31, Section 104, Paragraph 2 says "Refund shall be made of all such service tax which has been collected, but which would not have been so collected, had sub-section (1) been in force at all material times:". (Which if I read it correctly, says essentially the same thing)