CENVAT CREDIT -HOSPITALS

[rajiv soni]

1. A 250 Bed Hospital in a Metro has taken Service tax Registration .
2. Hospital  is charging Service Tax on entire Bill value wherever Payment is directly being made by Insurance Company.
3. Hospital is charging Service Tax on Executive/Pre recuitment health check up whever direct payment is being made  by corporates.
4. Hospital is constructing a New wing for which it is procuring construction related material and also procuring   Medical Equipments by paying Excise duty/CVD . For construcing the Buiding Hospital is also availing Various Services like architect,structural consultant,civil work,Plumbing etc.
5. For day today operations Hospital is procuring medicines,consumables,medical equipment Laboratory Equipments,office Equipments /Ambulance and other Capital Goods .
6. Hopital is also receving Services like Security Services, Canteen, Telephone,repair and mainenance etc.
7. Is the Hospital eligible for Cenvat Credit on 100 % Excise Duty /CVD wrt to Capital goods.
8. 80% of Billing is for Taxable Services and 20 % for Non Taxable Services.For Inputs material and Services Hospital wants to take proportionate credit for Taxable Services at the end of each month.
9. Based on above scenario is the understanding for taking CENVAT Credit as per point no. 8,9 is correct.Shall be grateful if relevant section is mentioned as well.

Thanks

AI Summary

Cenvat credit entitlement: separate records or prescribed payments required to claim full credit for mixed taxable and exempt services.
Hospitals can take CENVAT credit on excise duty/CVD for capital goods that meet the statutory definition and on input services used for taxable output services. Capital goods credit is often availed in a phased manner (portion in year of receipt and balance subsequently). To claim full credit with mixed taxable and exempt outputs, hospitals must maintain separate records segregating usage or follow the prescribed adjustment mechanism and make specified payments where records are not maintained.