2019 (9) TMI 462 - AT - Service Tax

Classification of services - health services or support services of business or commerce? - revenue sharing basis - agreement with various doctors/consultants on revenue sharing basis whereby a part of the doctor‟s/consultants fee is retained by them in lieu of providing administrative support to them - HELD THAT - The issue has been settled by this Tribunal in the case of M/S SIR GANGA RAM HOSPITAL, BOMBAY HOSPITAL & MEDICAL RESEARCH CENTRE, APPOLLO HOSPITALS, M/S MAX HEALTH CARE INSTITUTE LTD VERSUS CCE DELHI-I, CCE&ST INDORE, CCE&ST RAIPUR, CST NEW DELHI AND CST DELHI VERSUS M/S INDRAPRASTHA MEDICAL CORPORATION LTD 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. The appellant had not provided any business support service to the consultants/doctors or patient, therefore, no service tax is payable by appellant under the category of Business Support Service - appeal allowed - decided in favor of appellant.

Summary

Issues:
Demand of service tax along with interest confirmed against the appellant by the adjudicating authority. Penalty imposed under Sections 76, 77, and 78 of the Finance Act, 1994.

Analysis:

1. Issue of Tax Liability on Retained Amount for Providing Administrative Support:
- The appellant, engaged in providing health services, retained a part of doctors/consultants' fees for administrative support.
- Allegation: Doctors/consultants' fees collected by the appellant for administrative support taxable under "support services of business or commerce."
- Show cause notice issued, demand of service tax confirmed, penalty imposed.
- Appellant's argument: Relies on Tribunal decisions in similar cases for setting aside the impugned order.
- Adjudicating Authority's findings reiterated by the Ld. AR.
- Tribunal's analysis: Examined agreements, observed shared obligations, responsibilities, and benefits, found no specific infrastructural support specified in the agreements.
- Held: No identifiable taxable activity for tax liability of the appellant hospitals.

2. Interpretation of Statutory Provisions and Exemption for Health Care Services:
- Tribunal examined the scope of terms 'clinical establishments' and 'health care services' under Notification No. 25/2011-ST.
- Held: Clinical establishments providing health care services exempt from service tax.
- Revenue's view challenged: Taxing part of consideration received for health care services defeats exemption.
- Tribunal's decision: Share of clinical establishment not taxable as business support service, assertion legally unsustainable.
- Reference to Commissioner's order: Similar dispute resolved in favor of health care services classification.
- Conclusion: Impugned orders devoid of merit, set aside, appeal by Revenue dismissed.

3. Final Decision on Tax Liability and Relief Granted:
- Tribunal holds appellant did not provide business support service, hence no service tax payable.
- Impugned order set aside, appeal allowed with consequential relief if any.

In summary, the Tribunal analyzed the tax liability on the retained amount for administrative support, interpreted statutory provisions exempting health care services, and concluded that the appellant did not provide business support services. The impugned order was set aside, and the appeal was allowed, providing relief to the appellant based on detailed legal and factual analysis.