Hospital buliding - commercial activity

[Balasubramanian Natarajan]

A Doctor who owns a Hospital is planning to let out the Hospital buildings including the Equipment, Apparatus, Furniture fittings, X ray Scanning and clinical equipments to another doctor, The hospital will treat out patients and in patients The following questions emerge: 1.Can Hospital be covered under the exclusion clause (d) Building solely used for residential purposes and buildings used for the purposes of accomodation. 2.Can the activity of running an Hospital be called a Commercial activity and hence the letting out is to be treated as for furtherance of commerce. 3.Can we exclude the rental value for Equipments, Apparatus etc as thses are fixed in some cases cand not so in few cases.Een thgose fixed care capable fro removal withput any damage. Shall look forward to have views from others

[Surender Gupta]

It is very difficult to understand that premises used for Hospital or Nursing Home would be considered as used for “Accommodation purpose”. But, certainly, the rental income of movable assets installed in the premises is not subject to service tax. However, you may enter into separate agreement or terms for two items, otherwise, you may face musci if rental part of movable assets is deducted artificially.

AI Summary

Commercial activity: letting hospital premises unlikely to qualify as accommodation; rentals of movable medical equipment not subject to service tax. Premises used as a hospital or nursing home are unlikely to be regarded as 'used for accommodation'; operating a hospital is treated as commercial activity. Rental receipts for movable assets (equipment, apparatus, furniture, clinical equipment) installed in the premises are not subject to service tax, and parties should contract separately for premises and movable asset rentals to avoid challenges from artificial allocation.