TaxTMI 
TaxTMI 
2026 (5) TMI 1164
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....ed to as 'Hospital'/'Hospitals') for the purposes of diagnosis and treatment of cancer patients jointly. The revenue earned by way of diagnosis / treatment of the cancer patients through medical equipment is shared between the Appellant and the Hospitals, as per the agreed pre-determined ratio. Further, the Appellant bears the entire procurement, maintenance & installation cost and the Hospital obtains and maintains valid necessary licenses, permits and authorization required from Government / other regulatory bodies for operation of the said medical equipment. Copy of the Agreement dated 2.10.2022 entered between the Appellant and Kailash Cancer Hospital & Research Centre is enclosed (on an illustrative basis). Type B: The Appellant is engaged in the establishment and operation of an Imaging Centre for CT scan, MRI scan, ultrasound, digital x-ray and mammography services etc. in the campus of Jamia Hamdard, in accordance with the agreement entered with the latter. The cost and expenses incurred in the establishment and operation of the Imaging Centre is borne entirely by the Appellant, whereas Jamia Hamdard is providing space to the Appellant for establishment / running of the ....
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....cessary licenses, permits, authorizations etc. from the Governmental authorities for operation, use and running of the Linear Accelerator facility at the Centre. 4.2 Maintenance The Appellant shall provide on its own or procure a third-party to provide day to day preventive and remedial maintenance of the equipment at its own cost. 5.1(a) Personnel The Hospital shall provide a number of trained personnel to operate, run and use the equipment. Hospital will be responsible for providing wages, salaries or other employee benefits 5.1(g) Co-ordination Committee To oversee the performance of this agreement, the Parties shall constitute a 'Co-ordination Committee' consisting of two members with one member nominated by the Appellant and one member nominated by the Hospital. 8 Revenue sharing and Detailed break-up of revenue generated by the Linear Accelerator services, to be shared in the manner as set out in Schedule 3. Type B: Arrangement entered into with Jamia Hamdard for establishment and operation of an Imaging Centre in the latter's premises. Clause Description Details B-C Preamble In order to impart state-of-the-art train....
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....on has been employed / appointed by the Society upon the recommendation of a selection committee which shall include a member nominated by the Appellant. 7.1 Insurance Professional liability and malpractice insurance to be procured and maintained by the Appellant to cover claims arising from any acts, omission or error in the provision of services at the Imaging Centre. 8.2 Pricing Services to the in-patients as well as patients referred from other hospitals of Jamia Hamdard, shall be provided at the rates mutually agreed and set out in Schedule 5. 10.3 and 10.4 Revenue sharing and payments The Appellant shall be entitled to collect all payments for the services being provided to any patients by the Imaging Centre, except when services are provided to Society's patients. Society shall be entitled to receive 20% of the monthly gross receipts generated from the Imaging Centre and the remaining balance shall accrue to the Appellant shall be entitled to retain the balance. Issuance of Show Cause Notice dated 23.8.2016 ('impugned SCN'). 3. In the aforesaid matrix, an investigation was initiated by the departmental authorities against the Appellant. Pu....
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....ls was not that of partner/agent and the sole responsibility with respect to the patients was that of the hospital only. Furthermore, the Appellant was indemnified from all liabilities, including that of medical negligence. Had there been a joint venture where both parties together provided services to the patients, the liabilities would also be joint. • Due protection had been taken by the Appellant to cover losses. Thus, from a perusal of the agreement, it was clear that the parties had in mind a pre-determined amount for the services which had been agreed to as a percentage of the total revenue earned by the Hospital. • That in terms of the arrangement entered with Jamia Hamdard, the Appellant was not providing healthcare services to the patients since all the technical staff / medical experts were of Jamia Hamdard. Moreover, the services to the patients were being provided by Jamia Hamdard and not by the Appellant. • Effective control of the goods has been retained by the Appellant. Hence, the instant transaction was not a 'deemed sale' in terms of Article 366(29A) of the Constitution of India but rather a service. • The Appel....
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....es to levy VAT/ Sales Tax on transactions in the nature of right to use goods. The term "transfer of right to use goods" even though has not been defined in the Constitution however was interpreted in the judgment of Hon'ble Supreme Court in BSNL v. Union of India 2006 (2) STR 161 (SC) [pg. 65-83 of the case compilation] wherein five attributes for a transaction to be covered under "transfer of right to use goods" were noted, which are provided below- a. There must be goods available for delivery; b. There must be consensus ad idem as to the identity of the goods; c. The transferee should have a legal right to use the goods-consequently all legal consequences of such use including any permission or licenses required therefor should be available to the transferee; d. For the period during which the transferee has such legal right, it has to be at the exclusion of the transferor this is the necessary concomitant of the plain language of the statute- -viz. a 'transfer of the right to use' and not merely a license to use the goods; e. Having transferred the right to use the goods during the period for which it is to be transferred, t....
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....ervice. Therefore, the demand confirmed vide the impugned order is liable to be set aside. The Appellant and the Hospitals/Jamia Hamdard are working together in a joint venture towards a common purpose and income earned through sharing of revenue is not amenable to Service Tax. 12. It is also submitted that Appellant and the hospital/Jamia Hamdard have entered into revenue sharing agreement with each other with the ultimate purpose of providing healthcare services to patients. The said agreements have been executed to further the mutual interests of both the parties and not to provide any service to each other but to the ultimate patients. 13. From a bare perusal of the above clauses, it is apparent that the 14. arrangements entered by the Appellant with the Hospitals / Jamia Hamdard are in the nature of a joint venture for sharing of revenues by way of pooling of resources with the common objective of providing healthcare services to the ultimate beneficiary i.e., the patients. This position gets strengthened from the following undisputed factual positions, which have been tabulated as under: Type A (Agreement with Hospitals) Type B (....
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.... the Hospitals/Jamia Hamdard but only a certain percentage of the total net revenues collected from the patients in lieu of the activities performed for diagnosis / treatment of 8 10 • Shri Niraj Prasad v. Commissioner of CE & ST, Kanpur, Final Order No. 71597/2019 dated in Service Tax Appeal No. 3834 of 2012 - CESTAT Allahabad (pg. no. 178- 199 of case compilation) • Picasso Digital Media Pvt. Ltd. v. Commissioner, CGST, East-Delhi, Final Order No. 50270-50271/2024 in Service Tax Appeal No. 51788 of 2022 -CESTAT New Delhi (pg. no. 200-237 of case compilation) • Divya Yog Mandir Trust v. CCE, Meerut Final Order Nos. 51213 - 51216/2022 dated 23.12.2022 - CESTAT New Delhi * • Ambience Hospitality Pvt. Ltd. v. CCE, Delhi, 2019 (21) GSTL 400 -(Tri-Delhi) • Spencer International Hotels Ltd. v. Commissioner of CGST & Central Excise, Final Order No. 40461-40462/2023 dated 22.6.2023 -CESTAT Chennai (pg. no. 258-280 of case compilation) • Grand Royale Enterprises Ltd. v. C....
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.... Mohanrao Shinde SSK Ltd. v. Commissioner of CGST, Kolhapur, Final Order No. 85603- 85605/2026 dated 20.4.2026 in Service Tax Appeal No. 86543 of 2017(pg. no. 361-379 of case compilation) 15. Hence, in the present situation, there is no rendering of services by the Appellant to the Hospitals / Jamia Hamdard. Rather, it is a revenue sharing model wherein the contracting parties have got together to carry out a specific economic venture for mutual benefits. 16. Reliance in this context is also placed on Circular No. 109/03/2009-ST dated 23.2.2009 which clarifies that when two contracting parties enter into revenue sharing arrangement then both parties act on principal-to-principal basis and there is no provision of service amongst the parties. 17. The Ld. Commissioner vide the impugned Order, has confirmed the Service Tax demand by further alleging that the Appellant was indemnified from all liabilities, including that of medical negligence vis-à-vis the operation / use of 'Liner Accelerator' equipment was concerned, in the 'Type A' contractual arrangements entered with the Hospitals. It has also been alleged that due protection had been....
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....es provided by clinical establishments continued even after 01.07.2012 vide Notification No. 25/2012-S.T. dated 20.06.2012 [pg. 36-41 of case compilation]. The relevant entry is reproduced below: "In exercise of the powers conferred by sub-section (1) of section 93 of the Finance Act, 1994 (32 of 1994) (hereinafter referred to as the said Act) and in supersession of notification number 12/2012-Setvice Tax, dated the 17th March, 2012, published in the Gazette of India, Extraordinary, Part II, Section 3, Sub-section (i) vide number G. S.R. 210(E), dated the 17th March, 2012, the Central Government, being satisfied that it is necessary in the public interest so to do, hereby exempts the following taxable services from the whole of the service tax leviable thereon under section 66B of the said Act, namely :- 2. Health care services by a clinical establishment, an authorized medical practitioner or para-medics;" 24. Further, the definitions of clinical establishment as provided in the said Notification is reproduced as under: (j) "clinical establishment" means a hospital, nursing home, clinic, sanatorium or any other institution by, whatever name called, th....
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....Delhi and CST Delhi v. Indraprastha Medical Corporation Ltd, 2018 (11) G.S.T.L. 427 - CESTAT New Delhi (pg. no. 380-383 of case compilation) 27. In view of the above submissions, the Appellant and Jamia Hamdard/Hospitals were both engaged in providing healthcare services and thus, entitled to avail the exemption from payment of service tax during the entire relevant period. Therefore, the demand confirmed vide the impugned Order is unsustainable. Extended period of limitation is not invocable; Penalty is not imposable; and Interest is not recoverable 28. Without prejudice to the above, it is submitted that the SCN in present case was issued on 23.8.2016 for the period from 2011-12 to 2014-14 and therefore, the demand raised for the period from April 2011 to September 2013 is beyond the normal period of limitation and is time-barred. 29. It is submitted that the Appellant has not suppressed any facts. It is submitted that where the assessee believes the correctness of a legal position, and if there is scope for such belief, such as decisions of judicial forums, then, it cannot be said that there has been a wilful misstatement or suppression of facts, or contravention of ....
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....re only. In these circumstances, it cannot be said that the appellant has provided any service to NNC." 35. Further in the case of M/s Apollo Gleneagles Hospital Limited vs. Commissioner of Service Tax, Kolkata vide Final Order No. 76702 of 2024 dated 22.08.2024, this Tribunal has examined the issue and observed as under: "14. We find that the appellant has an arrangement for MRI and Dental Divisions, where the Experts were paying for MRI Scanning and providing Dental treatment. The appellant is a Joint Venture for providing sharing the amount received by the appellant. In case of MRI Scanning, the appellant retained 5% of the total amount received by them and in case of Dental, the appellant retained 20% of the amount recovered from the patients. The Revenue shows that the amount as retained by the appellant is under "Renting of Immovable Property Service". On going through the agreement placed before us, we find that the appellants were sharing the amount recovered from the patients for providing health care services. In that circumstances, the amount retained by the appellant is not towards the renting of immovable property services. Therefore, no service tax is paya....
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....the DSPs. The department entertained the view that the infrastructural support service provided by the appellant to various DSPs is tantamount to the service under "Support Service of Business or Commerce" and therefore, the appellant is liable to pay service tax on that. Further, perusal of the agreements between the parties clearly shows that the contracts between the appellant and various DSPs are on principal-toprincipal basis and are in the nature of sharing-revenue. As per the contracts, the appellant is required to provide infrastructure and DSPs are required to install their equipments; and the revenue earned from the patients is shared between the appellant and the DSPs and no taxable service is being provided by the appellant to DSPs. Here, it is pertinent to extract the relevant clauses of such agreements with regard to sharing of revenue. The relevant clauses of one of the contracts with one of DSPs, Dr. Lal Pathlabs Pvt Ltd ('LPL'), is reproduced herein below: "Revenue Sharing:- • "The Hospital" and LPL will share the net revenue as below. Net Revenues for this purpose means all revenues earned out of pathology tests of the hospital subject to dis....
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....ce tax on movie theaters, but the context is applicable in the present case also, because in the present case, the appellant and the DSPs are dealing with each other on principal-toprincipal basis. 9. We also find that as per the terms of the contracts, the appellant has allowed the DSPs to install their equipments and machines and operate their respective centers in the hospital. In fact, diagnostic services are provided by the Hospital through the patients using the expertise and machinery of the DSPs. All reports of such diagnostic services are issued under the name of the Hospital. Further, the billing of such services is also done by the appellant's Hospital to the patients directly. Further, the entire revenue from the diagnostic centers is accounted for in the books of account as 'revenue of the appellant' and the appellant pays for the services provided by the DSPs to the appellant after retaining its own percentage. It clearly shows that the service, if any, has been provided by DSPs to the appellant and not by the appellant to DSPs. 10. We also note that it is the appellant who established the Hospital and providing healthcare services to the patients an....