Sum retained by hospital from fees charged by contractual doctors not taxable as fee for support services

Where assessee, a hospital, was engaged in health care services to patients and to provide such services it had engaged doctors on contractual basis and it retained certain amount out of total charges collected from patients, assessee was not liable to pay service tax on retained amount under category of ‘support services of business or commerce’

Section 65(104C) of the Finance Act, 1994 – Support services of business or commerce – Assessee, a hospital, was engaged in health care services to patients – To provide such services, it had engaged professionals and doctors on contractual basis – These doctors were provided space in hospital with required facilities to attend to patients coming to hospital –

These doctors were paid professional fee in terms of contracts – Fee paid to doctors was computed based on a pre-determined ratio on amount received by assessee from patients – Adjudicating Authority held that part of amount retained by assessee out of total charges collected from patients was liable to service tax under category of ‘support services of business or commerce’ – Whether Adjudicating Authority was justified in his view – Held, No

Circulars and Notifications: Notification No. 30/2011 ST, dated 25-4-2011 and Notification No. 25/2012 ST, dated 20-6-2012

Citation-[2018] 94 taxmann.com 226 (New Delhi – CESTAT)