06 December 2011
Will service tax be applicable to diagnostic centres which have a pathology lab, etc? It provides services to employees of business entities. The business entity is billed on monthly basis & no payments are recovered from its employees.
08 December 2011
Section 65(19b):- “business entity” includes an association of persons, body of individuals, company or firm but does not include an individual.
Section 65 (105) Taxable service means any service provided (or to be provided)- (zzzzo) by any hospital, nursing home or multi-specialty clinic-
(i) To an employee of any business entity, in relation to health check-up or preventive care, where the payment for such check-up or preventive care is made by such business entity directly to such hospital, nursing home or multi-specialty clinics; or
(ii) To a person covered by health insurance scheme, for any health check-up or treatment, where the payment for such health check-up or treatment is made by the insurance company directly to such hospital, nursing home or multi-specialty clinic;
1. Services provided by hospital, nursing home or multi-specialty clinic are only taxable. Hence health-check up and preventive care facilities provided by labs and diagnostic centres and individual doctors are not taxable.
2. Any services provided to an individual will not fall within the ambit of Service Tax.
3. In case of treatment to a person covered by insurance scheme is only taxable. Hence bills paid by individuals and other business entities on behalf of its employees will not attract service tax. Here the basic criteria for taxability is that the person undergoing treatment should be covered under health insurance scheme.
Please read the following notification as well.
New Delhi, the 25th April, 2011
Notification No. 30/2011 – Service Tax
G.S.R. (E).- In exercise of the powers conferred by sub-section (1) of section 93 of the Finance Act, 1994 (32 of 1994), the Central Government, on being satisfied that it is necessary in the public interest so to do, hereby exempts the taxable service referred to in sub-clause (zzzzo) of clause (105) of section 65 of the Finance Act, from the whole of the service tax leviable thereon under section 66 of the said Act.
2.This notification shall come into force on the 1st day of May, 2011
So Service tax is now not applicable to Diagnostic centres.
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