2019 (4) TMI 178 - AT - Service Tax

Business Support Services - appellants have retained certain percentage of the consultant s fee charged from the patients as per agreement with different consultants on account of administrative support provided by appellants to various consultants/doctors - Held that - This Tribunal in the case of M/S. SIR GANGA RAM HOSPITAL VERSUS C.S.T., DELHI-I 2018 (7) TMI 1127 - CESTAT NEW DELHI , where it was held that The fact remains is that in the given arrangements/agreements with the diagnostic centres the appellant is not providing any health service. It is merely collecting money on behalf of the diagnostic centres for providing them the number of patients. Hence, the share of revenue so collected in the hands of the appellant cannot be categorized as a consideration for rendering the health service to the patients. The appellants had not provided any business support service to the consultants/doctors or patient, therefore, no service tax is payable by appellants under the category of Business Support Service - Appeal allowed - decided in favor of appellant.

Summary

Issues:
Appeal against demand of service tax, interest, and penalties under Sections 76, 77, and 78 of the Finance Act, 1994 for providing health services and retaining a part of doctors/consultants' fees for administrative support.

Analysis:
The appellants contested the demand of service tax, interest, and penalties imposed by the adjudicating authority for retaining a portion of doctors/consultants' fees for administrative support. The Tribunal examined the agreements between the appellants and doctors, focusing on shared obligations, responsibilities, and benefits. It was observed that the retained amounts were for health care services, not business support services. The Tribunal emphasized the distinction between professional activities and commercial activities, asserting that the doctors were engaged in a medical profession, not business or commerce. The agreements did not specify infrastructural support services, and the revenue model did not attribute any consideration to such services.

The Tribunal further analyzed the negative list regime exempting health care services from service tax, emphasizing that clinical establishments providing health care services were exempt. The Revenue's argument that a portion of consideration received for health care services should be taxed as business support service was deemed untenable. The Tribunal referenced a previous order where the Commissioner held that the hospital was not providing services to consultants/doctors, classifying the services as health care services extended to patients. Consequently, the Tribunal dismissed the Revenue's appeal, affirming that the appellants did not provide business support services to consultants/doctors or patients, thus no service tax was payable under the category of Business Support Service.

In conclusion, the Tribunal set aside the impugned orders, allowing the appeals with consequential relief, if any. The decision highlighted that the appellants did not provide business support services, leading to the dismissal of the Revenue's appeal. The judgment emphasized the exemption of health care services from service tax and the absence of legal justification to tax the share of clinical establishments supporting doctors' commerce or business. The detailed analysis and legal interpretation supported the appellants' position, ultimately resulting in the favorable outcome of the appeals.