Appellant liable for Service Tax on grants linked to training programs, but not on Healthy India Website upgrade grants.

The Tribunal confirmed the appellant's liability to pay Service Tax on grants received from MSD for providing training programs to doctors due to a direct link between the grant and the training service. However, the Tribunal ruled that no Service Tax was payable on grants received from the Ministry of Health for the upgradation of the Healthy India Website as no service provider-service recipient relationship existed. The appeal was partially allowed, with the judgment issued on 12.04.2018.

---

---

Issues:
1. Whether the appellant is liable to pay Service Tax on the amount received from MSD as part of a grant for providing training programs.
2. Whether the appellant is liable to pay Service Tax on the grants received from the Ministry of Health for the upgradation of the Healthy India Website.

Analysis:
1. The appellant, a Not-for-Profit Society, provided training to doctors in Diabetes Management in India and received grants from MSD. The dispute was whether the grant amount should be subject to Service Tax. The appellant argued that the grant was not linked to the training service provided and cited CBEC circulars and case laws. The Tribunal noted that the grant was specifically for defraying training expenses, and as per Section 67 of the Finance Act, "consideration" includes any amount payable for taxable services. The Tribunal found a direct link between the grant and the training service, upholding the Service Tax liability on the grant amount from MSD.

2. The appellant also received grants from the Ministry of Health for the upgradation of the Healthy India Website. The appellant contended that no service was rendered to the Ministry in exchange for the grant. Citing a CBEC circular and case laws, the Tribunal agreed that no service provider-service recipient relationship existed in this case. Therefore, the Tribunal held that no Service Tax was payable on the grants received from the Ministry of Health.

In conclusion, the Tribunal confirmed the Service Tax liability on the grants received from MSD for providing training to doctors but set aside the demand for Service Tax on the grants received from the Ministry of Health. The appeal was partially allowed, with the judgment pronounced on 12.04.2018.

---