2019 (3) TMI 1331 - AT - Service Tax

Classification of services - support services of business or commerce or not - doctors/consultants fee collected by the respondent-assessee for providing administrative support services - Held that - The issue has been settled by this Tribunal in the case of M/s. Sir Ganga Ram Hospital and others 2017 (12) TMI 509 - CESTAT NEW DELHI , where it was held that The service provided by the respondent hospital would merit classification under Health Care Services extended to the patients. Thus, the respondent-assessee were not provided any business support service to the consultants/doctors or patient, therefore, no service tax is payable by respondent/assessee under the category of Business Support Service - appeal dismissed - decided against Revenue.

Summary

Issues:
Appeal against demand of service tax, interest, and penalties | Appeal against dropping proceedings against respondent M/s. Alchemist Hospital Limited

Analysis:
The case involved an appeal against the demand of service tax, interest, and penalties imposed on the respondent for providing health services. The respondent had agreements with doctors/consultants for revenue sharing, where they retained a part of the fees charged from patients for administrative support. The Revenue alleged that this amount was taxable under "support services of business or commerce." The Commissioner (Appeals) dropped the proceedings, stating it was not a business support service. The Tribunal referred to a previous case involving a hospital and observed that the agreements between hospitals and doctors were for joint benefit with shared obligations, responsibilities, and benefits, not specifically for infrastructural support. The Tribunal found no taxable activity in the arrangement for tax liability. The Tribunal also highlighted that health care services were exempt from service tax under the negative list regime, and the Revenue's assertion would defeat the exemption provided to clinical establishments. The Tribunal dismissed the Revenue's appeal, upholding the decision that the hospital was not providing services to consultants/doctors but rather health care services to patients. Therefore, no service tax was payable under the category of Business Support Service.

In conclusion, the Tribunal held that the respondent did not provide business support services to consultants/doctors or patients, leading to the dismissal of the Revenue's appeal and allowing the appeal filed by the assessee.