2018 (3) TMI 508 - AT - Service Tax

Business Support Services - providing infrastructural and administrative support facilities to the visiting doctors & consultants - Service Tax liability - Held that - similar dispute came up before the Tribunal in the case of Sir Ganga Ram Hospital & Ors. Vs CCE, Delhi 2017 (12) TMI 509 - CESTAT NEW DELHI , where it was held that there is no legal justification to tax the share of clinical establishment on the ground that they have supported the commerce or business of doctors by providing infrastructure - appeal dismissed - decided against Revenue.

Summary

Issues:
Service Tax liability under 'Business Support Services'

Analysis:
The dispute in the present appeal revolves around the Service Tax liability of the assessee-Respondents under the category of 'Business Support Services'. The Revenue contended that the assessee-Respondents provide infrastructural and administrative support facilities to visiting doctors, leading to the demand and confirmation of Service Tax liability.

Upon examining the facts and material available, it was noted that a similar dispute had been addressed by the Tribunal in a previous case involving Sir Ganga Ram Hospital & Ors. The Tribunal in the previous case held that the agreements between the hospitals and individual doctors were for the joint benefit of both parties, with shared obligations, responsibilities, and benefits. The agreements did not specify infrastructural support services provided to the doctors, and the revenue model did not attribute any consideration to such services.

The Revenue's contention that the retained amount by the hospitals compensated for infrastructural support provided to the doctors was deemed an inference rather than explicitly stated in the agreements. The Tribunal highlighted that the hospitals were primarily engaged in providing health care services, and the arrangement with doctors was mutually beneficial, focusing on health care provision rather than business support services.

Examining the statutory provisions for Business Support Services (BSS), it was concluded that the present arrangement did not involve any identifiable taxable activity for the appellant hospitals. Additionally, under the negative list regime, health care services were exempt from service tax, further supporting the conclusion that the services provided by the hospitals did not fall under the taxable category.

The Tribunal emphasized that the exemption provided to health care services by clinical establishments would be undermined if a part of the consideration received for such services was taxed as business support services. Therefore, the Revenue's assertion that the hospitals supported the business or commerce of doctors through infrastructure was deemed factually and legally unsustainable.

Based on the precedent set in the Sir Ganga Ram Hospital case, the Tribunal found no grounds to interfere with the impugned order, resulting in the dismissal of the appeal filed by the Revenue.