Service tax on hospitals
This query is : Resolved
10 September 2010
Is service tax applicable on hospitals.
I think its apllicable only for the payment received from a business entity for its employees and payment received from the health insurance company.
I think its apllicable only for the payment received from a business entity for its employees and payment received from the health insurance company.
CMA Ramesh Krishnan
(Expert)
10 September 2010
Yes, you are correct
The government has imposed service tax on health check-ups undertaken by hospitals or medical establishments for employees of business entities and services provided under health schemes offered by insurance companies. However, the tax on these services would be payable only if the payment for such health check-up or preventive care or treatment, etc. is made directly by the business entity or the insurance company to the hospital or medical establishment. Therefore, hospitals or medical establishments providing the services will have to register themselves with the service tax department as service providers and charge service tax on the services if the total turnover of taxable services exceeds Rs 10 lakh. Additionally, the service providers can claim Cenvat credit of the input service tax/excise paid by them for services received/ machinery bought by them for providing taxable services. Provisions of the rule 6 of the Cenvat Credit Rules, 2004 shall be applicable in this regard.
The government has imposed service tax on health check-ups undertaken by hospitals or medical establishments for employees of business entities and services provided under health schemes offered by insurance companies. However, the tax on these services would be payable only if the payment for such health check-up or preventive care or treatment, etc. is made directly by the business entity or the insurance company to the hospital or medical establishment. Therefore, hospitals or medical establishments providing the services will have to register themselves with the service tax department as service providers and charge service tax on the services if the total turnover of taxable services exceeds Rs 10 lakh. Additionally, the service providers can claim Cenvat credit of the input service tax/excise paid by them for services received/ machinery bought by them for providing taxable services. Provisions of the rule 6 of the Cenvat Credit Rules, 2004 shall be applicable in this regard.
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