The case pertains to the levy of service tax, interest, and ...

Diagnostic Service Providers' Revenue Sharing Arrangement Exempted from Service Tax.

Case Laws     Service Tax

October 18, 2024

The case pertains to the levy of service tax, interest, and penalty on business support services involving revenue sharing between the appellant and diagnostic service providers (DSPs). The key points are: The agreements between the appellant and DSPs were principal-to-principal in nature for revenue sharing, not for rendering taxable services by the appellant. The appellant provided infrastructure, and DSPs installed equipment; revenue from patients was shared without any service charges paid by DSPs. The transactions were recognized as principal-to-principal by a circular, and providing basic amenities cannot be considered support services. Healthcare services were exempted from service tax during the relevant period. The appellant did not suppress material facts or evade tax, as earnings were recorded, and the issue involved interpretation. Hence, the extended period of limitation cannot be invoked. The demand for service tax, interest, and penalty was set aside by the appellate tribunal.

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