Hospital revenue-sharing with consultant doctors for exempt health care services is not business support service absent distinct taxable support.

A hospital's revenue-sharing arrangement with consultant doctors was not business support service because the doctors were engaged to provide exempt health care services within the hospital, while the hospital managed patients, records, facilities and related assistance as part of that same service delivery. The retained share of patient collections was attributable to the exempt health care arrangement and not to any distinct infrastructural or secretarial support provided to the doctors. In the negative list and exemption regime, the receipts could not be artificially split and taxed as business support service merely because the hospital retained part of the charges, so the service tax demand was unsustainable.

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Issues: Whether the hospital's arrangement with consultant doctors constituted provision of business support service so as to justify confirmation of service tax demand.

Analysis: The agreement showed that the doctors were engaged to render health care services within the hospital under a mutually beneficial revenue-sharing model, with shared obligations, responsibilities, and benefits. The hospital managed patients, records, facilities, and related assistance as part of delivering health care services, and the retained amount was attributable to that service arrangement rather than to any identifiable infrastructural or secretarial support provided to the doctors. In the negative list / exemption regime, health care services rendered by clinical establishments were exempt, and the same receipts could not be artificially split and taxed as business support service merely because the hospital retained a share of the patient charges.

Conclusion: The arrangement did not amount to business support service. The demand of service tax and the impugned confirmation order were unsustainable, and the appeal succeeded.

Ratio Decidendi: Where a hospital engages consultants to render exempt health care services under a revenue-sharing arrangement, the hospital's share of the collection cannot be taxed as business support service in the absence of a distinct taxable support service.

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