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TMI Blog2020 (11) TMI 536X X X X Extracts X X X X X X X X Extracts X X X X ..... mand of service tax proposed in the show cause notice has been confirmed with interest and penalty. 2. The appellant provides various categories of health care services to its patients and for this purpose appointed professionals/doctors/consultants on contractual basis. The doctors were given designated space in the hospital premises in the form of chambers with an examination table for examining the patients coming to the hospital. The doctors appointed by the appellant were paid a professional fee, which was computed in the following manner. A= Amount received by the patient for medical facilities such as operation/surgery/consultancy provided by the doctors B= Amount retained by the Appellant as 'collection charges'/ 'facilitation ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... otherwise, the services provided were specifically exempted from payment of service tax under entry no. 2 of the Notification dated June 20, 2012. 6. These contentions of the appellant were not accepted by the Commissioner and the relevant portions of the order passed by the Commissioner are reproduced below. "The Noticee has not disputed the deduction of collection charges from the doctors on account of provision of consultation room or examination room and other infrastructural facilities available in the hospital which include maintenance of proper cleanliness and hygiene of the premises, provision of furniture, electricity, security, testing facilities, common reception and lounge etc. All these activities also require trained manpo ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ormity, abnormality or pregnancy. In other words, only the health care services provided by a hospital or a medical practitioner are exempt under the notification. Any services, other than healthcare services, provided by a hospital would not be covered by the said notification. Thus the claim that the assesse is undisputably a hospital and hence exemption to a clinical establishment would be admissible in terms of the notification is ill-founded. 4.6.6 As held above, the amount retained by the notice being 'Collection Charges' was on account of rendering infrastructural support to the doctors for use of the hospital infrastructure, where exemption under the Notification is not available to the noticee and as such I hold that the noticee ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... in connection with the earlier show cause notice to the appellant which involved the period both before and after July 1, 2012. The Tribunal held, after a careful consideration of the conditions prescribed in the agreement, that the arrangement was for joint benefit of both the parties with shared obligations, responsibilities and benefits. The relevant portion of the decision is reproduced below. "5. The claim of the Revenue is that the appellants have provided infrastructural support service to various doctors. As a consideration for such support, they have retained a part of the amount collected from visiting patients. We have perused some of the agreements/appointment arrangements entered into between the appellants hospitals and the ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... to the doctors to attend to their work in the appellant hospitals. We find this is only an inference and not coming out manifestly from the terms of the agreement. Here, it is very relevant to note that the appellant hospitals are engaged in providing health care services. This can be done by appointing the required professionals directly as employees. The same can also be done by having contractual arrangements like the present ones. In such arrangement, the doctors of required qualification are engaged/contractually appointed to provide health care services. It is a mutually beneficial arrangement. There is a revenue sharing model. The doctor is attending to the patient for treatment using his professional skill knowledge. The appellants ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... red by clinical establishments. We have examined the scope of the terms 'clinical establishments' and 'health care services'. ****** 11. These two provisions available in Notification No. 25/2012 will show that a clinical establishment providing health care services are exempted from services tax. The view of the Revenue that is spite of such exemption available to health care services, a part of the consideration received for such health care services from the patients shall be taxed as business support service/taxable service is not tenable. In effect this will defeat the exemption provided to the health care services by clinical establishments. Admittedly, the health care services are provided by the clinical establishments by engagi ..... X X X X Extracts X X X X X X X X Extracts X X X X
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