2025 (2) TMI 902 - AT - Service Tax

Exemption from service tax - services provided to the government for public health purposes - Entry No.25(a) of Mega Exemption Notification No.25/2012-ST - HELD THAT - The Appellants have provided vehicles for transportation of Doctors Paramedics and health workers for carrying out their day to day work in the National Health Mission. Therefore the provision of vehicles to personnel engaged in execution of National Health Mission etc. by the Appellant is to be construed as any service rendered to Government in relation to public health. The services provided by the Appellants involving the transportation of health professionals for the National Health Mission fell within the exemption under Notification No.25/2012-ST. The Original Authority was correct in holding that the services rendered by the Appellants are not taxable - The impugned order is set aside and the appeal is allowed.

Summary

The judgment by the Appellate Tribunal CESTAT ALLAHABAD concerns the taxation of services provided by M/s Jyoti Enterprises to the Chief Medical Officer in Gorakhpur for the implementation of health programs. The core legal issue revolves around whether these services are taxable under the Service Tax regime or qualify for exemption as services provided to the government for public health purposes.The Appellants argued that their services are exempt under Entry No.25(a) of Mega Exemption Notification No.25/2012-ST as they provided services to the State Government under the National Health Mission. They relied on relevant case law and circulars to support their position.The Revenue contended that the services provided by the Appellants were akin to rent-a-cab operator services and hence taxable. They argued that the exemption for transportation of patients in ambulances did not extend to vehicles supplied for the transportation of doctors and paramedics.The Tribunal analyzed the legal framework, including the relevant notifications and circulars, to interpret the scope of exemption for services provided to the government in relation to public health. They referred to precedents and the CBEC Circular to support their reasoning.The Tribunal found that the services provided by the Appellants, involving the transportation of health professionals for the National Health Mission, fell within the exemption under Notification No.25/2012-ST. They emphasized the broad interpretation of "any activity" in relation to public health and concluded that the services rendered by the Appellants were covered by the exemption.In light of the above analysis, the Tribunal set aside the impugned order and allowed the appeal, ruling in favor of the Appellants. The judgment established the principle that services provided to the government for public health purposes are exempt from service tax under the relevant notification.This judgment highlights the importance of interpreting tax exemptions in a manner that aligns with the legislative intent of promoting public health services. The Tribunal's decision provides clarity on the tax treatment of services related to public health initiatives, ensuring that such essential services are not burdened with additional taxation.