TaxTMI 
TaxTMI 
2019 (3) TMI 1331
X X X X Extracts X X X X
X X X X Extracts X X X X
....nfirmed against the assessee by the adjudicating authority. The penalties were also imposed under Sections 76,77, and 78 of the Finance Act, 1994. Whereas the Revenue is in appeal against the order of dropping the proceedings against respondent M/s. Alchemist Hospital Limited. 3. As the facts are identical in these appeals, therefore, both the appeals are disposed by this common order. 4. The facts of the case are that the respondent- assessee are engaged in providing health services. An Audit was conducted and it was noticed that the respondent-assessee has entered into agreement with various doctors/consultants on revenue sharing basis whereby a part of the doctor's/consultants fee is retained by them in lieu of providing administra....
X X X X Extracts X X X X
X X X X Extracts X X X X
.... the agreements on record. The dispute in the present appeals is with reference to the tax liability of the appellant hospitals under the category of business support services. The statutory provision for the said tax entry is as below: "Section 65 (104c) 'support services of business or commerce' means services provided in relation to business or commerce and includes evaluation of prospective customers, telemarketing, processing of purchase orders and fulfilment services, information and tracking of delivery schedules, managing distribution and logistics, customer relationship management services, accounting and processing of transactions, operational or administrative assistance in any manner, formulation of customer service and....
X X X X Extracts X X X X
X X X X Extracts X X X X
....gement are for joint benefit of both the parties with shared obligations, responsibilities and benefits. The agreements do not specify the specific nature or list of facilities which can be categorized as infrastructural support to the doctors. The revenue model, as agreed upon between the contracting parties also, did not refer to any consideration attributable to such infrastructural support service. 6. The proceedings by the Revenue, initiated against the appellant hospitals, are mainly on the inference drawn to the effect that the retained amount by the hospitals out of total charges collected from the patients should be considered as an amount for providing the infrastructure like room and certain other secretarial facilities to the....
X X X X Extracts X X X X
X X X X Extracts X X X X
....tals and received health care services. For providing such services, the appellants entered into an agreement, as discussed above, with various consulting doctors. We do not find any business support services in such arrangement. 7. The inference made by the Revenue that the retained amount by the hospital is to compensate the infrastructural support provided to the doctors can be examined in another angle also. Reading the statutory provisions for BSS, we note that the services mentioned therein are "provided in relation to business or commerce." As such, to bring in a tax liability on the appellant hospital, it should be held that they are providing infrastructural support services in relation to business or commerce. That means, the d....
X X X X Extracts X X X X
X X X X Extracts X X X X
....esent arrangement for tax liability of the appellant hospitals. 9. Under negative list regime w.e.f. 01.07.2012, the health care services are exempt from service tax. Earlier the health care services were only taxed for specified category of hospitals and for specified patients during the period 01.07.2010 to 01.05.2011. With effect from 01.05.2011, health care services were exempt from service tax under Notification No.30/2011 ST. After introduction of negative list tax regime, Notification No. 25/2011-ST exempted levy of service tax on health care services rendered by clinical establishments. We have examined the scope of the terms 'clinical establishments' and 'health care services'. The notification defines these terms. The term 'cli....
X X X X Extracts X X X X
X X X X Extracts X X X X
....ct this will defeat the exemption provided to the health care services by clinical establishments. Admittedly, the health care services are provided by the clinical establishments by engaging consultant doctors in terms of the arrangement as discussed above. For such services, amount is collected from the patients. The same is shared by the clinical establishment with the doctors. There is no legal justification to tax the share of clinical establishment on the ground that they have supported the commerce or business of doctors by providing infrastructure. We find that such assertion is neither factually nor legally sustainable. 12. The Revenue has filed an appeal against order dated 01.02.2016 of Commissioner of Service Tax, Delhi-I. In....