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of <h1>Nursing home wins service tax relief on pathology lab joint venture arrangement, miscellaneous income demands set aside</h1> <h3>Aashlok Nursing Home Pvt. Ltd. Versus Principal Commissioner of Central Excise & Service Tax, Panchkula</h3> Aashlok Nursing Home Pvt. Ltd. Versus Principal Commissioner of Central Excise & Service Tax, Panchkula - TMI Issues:1. Quashing of order confirming demand with interest and penalty2. Tax liability on nursing home receipts, consultation receipts, renting of property, and miscellaneous incomeAnalysis:The case involved M/s Aashlok Nursing Home Pvt. Ltd. challenging the order confirming a demand passed by the Principal Commissioner of Central Excise and Service Tax. The appellant, a multi-specialty hospital, engaged in providing health care services through arrangements with pathology laboratories and specialized doctors. The show cause notice proposed service tax on various receipts, including nursing home receipts, consultation receipts, renting of property, and miscellaneous income. The appellant denied the allegations but the Principal Commissioner confirmed a demand of Rs. 97,58,904 invoking the extended period of limitation.Regarding the tax liability on nursing home and consultation receipts, the appellant argued that the arrangement with doctors did not fall under 'business auxiliary service' and cited precedents supporting their position. The Tribunal referred to previous decisions and held that under the negative list regime, health care services were exempt from service tax. The revenue model between hospitals and doctors for shared obligations and benefits did not constitute business support services.On the issue of tax liability concerning the relationship with pathology laboratories, the appellant contended it was a joint venture where no services were provided to each other. The Tribunal agreed, emphasizing the collaborative nature of the arrangement where responsibilities were shared, and infrastructural needs were met by both parties. The Tribunal cited the decision in Mormugao Port Trust to support the finding of a joint venture without service provision.Regarding the demand under 'renting of immovable property services,' the appellant did not contest the confirmation. However, for the miscellaneous income, the show cause notice lacked clarity on the proposed service category, leading to the demand confirmation being unsustainable. Consequently, the Tribunal set aside the order confirming the demand on nursing home and consultation receipts, as well as miscellaneous income, allowing the appeal partially.In conclusion, the Tribunal held that the Principal Commissioner erred in confirming the demand under specific categories, based on the nature of arrangements and precedents cited. The judgment highlighted the exemption of health care services from service tax and the collaborative, non-service-based nature of the appellant's relationships with doctors and pathology laboratories. The appeal was allowed in part, with the demand under certain categories being set aside.
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