Life Care Hospital Ltd. Vs Commissioner of CGST and Central Excise (CESTAT Delhi)
In Life Care Hospital Ltd. vs. Commissioner of CGST and Central Excise, the CESTAT Delhi ruled that processing charges for Mediclaim, received by hospitals, fall under healthcare services and are exempt from service tax. The appellant, Life Care Hospital Ltd., argued that the service charges deducted from claims were for administrative work related to filing Mediclaim for patients, and hence, part of healthcare services. The Revenue, however, contended that these charges were commission or brokerage and taxable under “Business Auxiliary Services.” CESTAT examined the definitions of “clinical establishment” and “healthcare service” under Notification No. 25/2012-ST and ruled in favor of the hospital. It held that the services provided by hospitals, including preparing and processing Mediclaim, were integral to healthcare services and exempt from tax. The decision aligned with a similar ruling in the case of Sir Ganga Ram Hospital, further strengthening the exemption for healthcare services from service tax under the negative list regime post-2012. Thus, the demand for service tax by the Revenue was rejected.
FULL TEXT OF THE CESTAT DELHI ORDER
1. M/s. Life Care Hospital Ltd.1 aggrieved by the Order-in-Appeal No.IND-EXCUS-000-APP-13-2023-24 dated 20.04.2023, whereby the demand of service tax has been confirmed under the category of “Business Auxiliary Service” while rendering “health care service”.
