2024 (5) TMI 913 - HC - GST

Healthcare Provider Wins Tax Dispute, GST Exemptions Upheld with Directive for Reassessment Within 8 Weeks

Karaikudi Medical Centre and Hospital Ltd., Represented by its Authorized Signatory Dr. Saleem Mohamed Versus The State Tax Officer, Tamil Nadu

HC allowed writ petition challenging tax demand against healthcare service provider. Court found partial exemptions applicable under GST notifications and ... Confirmation to tax together with interest under Section 50 of the TNGST Act, 2017 and the penalty under Section 73(9) of the said Act - exemption from GST - health services - difference in the turnover - Tax on testing tax - Tax on RCM towards rent - Tax on other income - Tax on RCM towards professional fees. Tax on testing tax - Tax on RCM towards rent - Tax on other income - Tax on RCM towards professional fees - HELD THAT:- Prima facie, the petitioner appears to be entitled for exemption under the Notification No.12/2017-CT (Rate) dated 28.06.2017 insofar these services are concerned and under Notification No.13/2017-CT (Rate) dated 28.06.2017 Difference in the turnover - HELD THAT:- The submission of the learned counsel for the petitioner is reasonable as there was an erroneous consideration of the turnover/income in the profit and loss account for the period in dispute which includes the period covered by pre-GST era under the provisions of the Finance Act, 1994. Considering the fact that this issue would require a proper and detailed consideration by the respondent and considering the fact that many of the grounds which are canvassed before this Court were not taken up by the petitioner before the respondent which has culminated in the impugned order, the impugned order is set aside and the case is remitted back to the respondent to pass a fresh order on merits and in accordance with law, within a period of 8 weeks from the date of receipt of a copy of this order. Petition allowed by way of remand. Issues Involved:The petitioner challenges an order by the respondent confirming tax, interest, and penalty under specific sections of the TNGST Act, 2017.Details of the Judgment:1. Tax Dispute: The petitioner, a hospital providing health services, claims exemption from GST for services and testing charges under Notification No.12/2017-CT (Rate) dated 28.06.2017.2. Rent Tax Issue: The petitioner argues that Notification No.13/2017-CT (Rate) dated 28.06.2017 does not apply to renting commercial property, thus exempting them from tax on reverse charge basis.3. Professional Fees: The petitioner contends that professional fees, mostly from the pre-GST period, are exempt under Notification No.12/2017-CT (Rate) dated 28.06.2017.4. Jurisdictional Challenge: The petitioner asserts that the demand is without jurisdiction as it includes pre-GST turnover, erroneously compared with the profit and loss account and GST returns.5. Respondent's Position: The Additional Government Pleader argues that the issues can be addressed through a statutory appeal under Section 107 of the TNGST Act, 2017, and raises questions of fact.6. Court Decision: The court finds the petitioner entitled to exemptions under the mentioned notifications for specific items in the tax demand. It notes errors in considering turnover/income and remits the case back to the respondent for a fresh order within 8 weeks.7. Remand Instructions: The petitioner must cooperate by filing a proper reply within two weeks, and the impugned order is treated as a corrigendum to the Show Cause Notice. The writ petition is allowed by way of remand without costs.