TaxTMI 
TaxTMI 
2023 (1) TMI 391
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....engages doctors as consultants, resident doctors , senior resident doctors and doctors on internship basis and whenever medical services are provided to a patient, the appellant raises a bill towards room charges, medicines, diagnostics charges for radiology and laboratories and doctor fees. The doctors so engaged are paid their share of fees. 3. However, two show cause notices, were issued to the appellant, on the premise that the appellant was providing "business support service" to doctors by providing facilities and administrative support to them. The relevant portion of the show cause notice dated April 22, 2013 is reproduced below: "2. An intelligence was gathered by the officers of Anti-Evasion Branch of Service Tax Commissionerate, Delhi that the Hospital is engaged in providing "Business Support Service", "Business Auxiliary Services" and "Renting of Immovable Property Services" and is not paying service tax properly. xxxx xxxx xxxx Further, during the course of investigation, assessee provided copies of ST-3 returns and Financial statements for the period 2007-08 to 2011-12. Vide this office letter dated 11/3/2013, the assessee was aske....
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....g to me for retaining this amount is on account of the facilities provided by the Noticee hospital to the doctor in the form of OT Room, the necessary medical machineries, necessary medical attendants and supporting stall, secretarial supports, administration facilities and other facilities. It is necessary to be mention here that, without the above mentioned facilities provided by the Notice, the doctors cannot complete their healthcare activities and due to this the Noticee is retaining certain percentage of the amount and the department has raised the demand of Service tax only on this portion of the amount retained by the Noticee, which according to me is legal and correct. 51. I am further of the view that, there is no doubt that the entire activity of organizing infrastructural facilities for the doctors are done on a commercial basis and funds are retained. Without the infrastructural support of the Noticee, it would not have been possible for the doctors to provide the medical services to the patients. According to my view, the payments retained are for services rendered in connection with infrastructural support services provided by the Notice and the present dema....
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....spital, you are hereby informed that you have been empanelled as an Honorary Consultant- Plastic Surgery we.f 3rd December 2008 on the following terms and conditions: 1. Your attachment to this hospital will be till 3 1st March 2009. 2. You will be attached to Dr Richie Gupta, Senior Consultant Plastic Surgery- III. 3. Your attachment to the hospital may be discontinued on one month's notice on either side without any obligation. 4. You will attend the General OPD and paid clinics on the days allotted to you. 5. You will be required to follow Code of Conduct, discipline, Rules & Regulations of the Hospital as laid down from time to time. 6. You will practice in your specialty ethically, for which you are attached to this hospital. Practising in other specialties for which other consultants are available in this hospital shall amount to breach to conduct. 7. In addition to the professional work, you will be expected to help administration in running the hospital through your participation in committee spectrum of Management. 8. You will be required to attend OPD punctually and regularly (80% attendance will ....
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....orce from time to time. 24. You will be required to have your professional indemnity insurance done before joining the hospital and get it renewed before its expiry. The hospital will not be liable for any claims or damages on account of medical negligence." 12. A perusal of the aforesaid agreement indicates that patients will be billed according to the charges stipulated in the chargelist and out of the total fees (after the deduction of TDS) settled at the time of appointment, 78% would be paid to the doctors and the remaining 22% will be retained by the Hospital. 13. The Commissioner has found that the amount retained by the Hospital is towards the services rendered by the Hospital to the doctors for providing all the necessary facilities which are necessary and without which the doctors cannot perform their activities and therefore, the said service would be classifiable under section 65 (104) (c) as "support services of business and commerce" and taxable under section 65 (105) (zzzq) of the Finance Act 1994. 14. This precise issue had come up for consideration before two Benches of the Tribunal in Ganga Ram Hospital. The first decision rendered on December 06....
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....om and certain other secretarial facilities to the doctors to attend to their work in the appellants hospitals. We find this is only an inference and not coming out manifestly from the terms of the agreement. Here, it is very relevant to note that the appellant hospitals are engaged in providing health care services. This can be done by appointing the required professionals directly as employees. The same can also be done by having contractual arrangements like the present ones. In such arrangement, the doctors of required qualification are engaged/contractually appointed to provide health care services. It is a mutually beneficial arrangement. There is a revenue sharing model. The doctor is attending to the patient for treatment using his professional skill and knowledge. The appellants hospitals are managing the patients from the time they enter the hospital till they leave the premises. ID cards are provided, records are maintained, all the supporting assistance are also provided when the patients are in the appellant hospital premises. The appellant hospital also manages the follow-up procedures and provide for further health service in the manner as required by the patients. A....