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TMI Blog2023 (1) TMI 391X X X X Extracts X X X X X X X X Extracts X X X X ..... or 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 asked to provide information regarding total fees collected, amount given to doctor and ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ctor 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 demand is only in respect of Payments retained by the Notice as a percentage of the amount to be paid to doctors. Ther ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ing 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 be compulsory). Any absence is to be informed earlier. 9. You will be required to explain the nature of illness, diagnosis or operative procedures and the nature of treatment and prognosis person ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 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, 2017 was considered in the subsequent decision rendered on September 02, 2020. 15. Paragraphs 5, 6, 9 and 11 of the first decision rendered by the Tribunal on December 06, 2017 relate to the period before and after July 01, 2012. The Tribunal, after a consideration of the conditions prescribed in the agreement ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 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. As can be seen that the appellants hospitals are actually availing the professional services of the doctors for providing health care service. For this, they are paying the doctors. The retained money out of the amount charged from the patients is necessarily also for such health care services. The patient paid the full amount to ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 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." (emphasis supplied) 16. The aforesaid decision of the Tribunal was accepted by the Department. The subsequent decision of the Tribunal rendered on September 02, 2020 followed the earlier decision. 17. It also needs to be noted that the same view has been taken by the Tribunal in the following cases: (i) M/s. Gujarmal Modi Hospital & Research Centre for Medical Science Versus CST, Delhi-II [2019(1) TMI 378-CESTAT NEW DELHI]. (ii) M/s. Fortis Healthcare (India) Limited versus CCE & ST-Chandigarh-I [2019 (9) TMI 462-CESTAT CHANDIGARH]. (iii) M/s. Ivy Health & Life Science Pvt. Ltd. Versus CCE, Chandigarh-II/Ludhiana [2019 (4) TMI 178- CESTAT CHANDIGARH]. (iv) CCE & ST, Panchkula, Delhi-IV versus Alchemist Hospital Limited, Artemis Medicare Services Limited [2019 (3) TMI 1331- CESTAT CHANDIGARH]. 18. Thus, in view of the aforesaid decisions of the Tribunal, it has to be held that the Commissioner was not justified in confirming the demand of service tax under th ..... X X X X Extracts X X X X X X X X Extracts X X X X
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