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World over, business organizations maintain medical histories of their employees which are used not only for medical purposes but also for finding the suitability of a person for a particular job or for promotion etc. Increasingly, this activity is being outsourced for a consideration. Such records are either maintained by certain designated hospitals or even by independent record keepers for a charge. This activity is now being brought under service tax. It is proposed to insert clause (zzzzp) in Section 65(105) of the Act so as to define taxable service as “service provided or to be provided to any business entity, by any other person, in relation to storing, keeping or maintaining of medical records of employees of a business entity;” If service is rendered to an individual, no service tax is chargeable as individual is not a ‘business entity’.

Business Entity:- It includes an association of persons, body of individuals, company or firm but to exclude an individual.

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