2019 (6) TMI 327 - AT - Service Tax

Taxability - Healthcare services - services received by beneficiaries below poverty line under the scheme where the insurance was offered by the ICICI Lombard General Insurance Company. - HELD THAT - The issue is no more res-integra and is decided in the case of HIGHWAY HOSPITAL AND VARUNA HOSPITAL VERSUS COMMISSIONER OF CUSTOMS, CENTRAL EXCISE SERVICE TAX, ALLAHABAD 2019 (5) TMI 662 - CESTAT ALLAHABAD where it was held that The requirement in the definition of said service is that the treatment is provided by service provider and payment is made by insurance company directly to the service provider, then it satisfies the definition of health services provided under Section 65(105)(zzzzo) of Finance Act, 1994 - the services rendered the appellant were chargeable to service tax. Benefit of N/N. 12/2003-ST dated 20.06.2013 - Supply of medicines or not - benefit denied to the appellant since the sale of the medicines was not established through the record - HELD THAT - The Original Adjudicating Authority has observed that the appellant had submitted a chart before him prepared by them on the basis of Online billing sent to M/s ICIC Lombard for charging the said amount payable in respect of each and every beneficiary patient with their unique ID number and the amount charged included details about the breakup of cost of medicines, nursing charges, Anesthesia charges, Surgery Charges, Consultants fees, O.T. charges, Bed charges etc. we note that the claims made by the appellant with the insurance company were honored and payments were made to them. This establishes that the cost of medicines incurred during the treatment have been reimbursed by insurance company, which establishes the sale of medicines to the insurance company - the evidence for sale of medicines is provided during the proceedings before the Original Adjudicating Authority and since such evidence is available, the appellants were entitled for the benefit of said notification. Penalties - HELD THAT - The issue is of bonafide interpretation of provisions of law - penalties set aside. Appeal disposed off.

Summary

Issues:
1. Chargeability of service tax for health services provided under a government scheme.
2. Eligibility for exemption under Notification No. 12/2003-ST for medicines utilized during treatment.

Analysis:

Issue 1: Chargeability of service tax for health services
The case involved the appellant providing health services under a scheme by the Government of India, and the issue was whether service tax was applicable. The Original Adjudicating Authority held that service tax was payable for services provided to beneficiaries below the poverty line. The Commissioner (Appeals) upheld this decision, stating that the service tax was chargeable and that the appellant was not entitled to the benefit of Notification No. 12/2003-ST due to lack of evidence regarding the sale of medicines. The Tribunal, after considering various precedents, including a Final Order related to a similar case, concluded that the services rendered by the appellant were indeed chargeable to service tax.

Issue 2: Eligibility for exemption under Notification No. 12/2003-ST
Regarding the admissibility of exemption under Notification No. 12/2003-ST for medicines utilized during treatment, the Original Adjudicating Authority noted that the appellant provided evidence of the cost of medicines being reimbursed by the insurance company, indicating the sale of medicines to the insurance company. This evidence was considered sufficient to establish the sale of medicines, making the appellant eligible for the benefit of the notification. Consequently, the Tribunal set aside the earlier decision and confirmed the demand for service tax while removing the penalties imposed, considering the issue as a genuine interpretation of the law.

In conclusion, the Tribunal upheld the chargeability of service tax for the health services provided by the appellant and granted the benefit of the exemption under Notification No. 12/2003-ST based on the evidence presented regarding the sale of medicines. The appeal was disposed of accordingly.