CENVAT CREDIT BY HOSPITAL

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rajiv

self

60 Points Posted on 07 February 2011

1. A 250 Bed Hospital in a Metro has taken Service tax Registration .

2. Hospital is charging Service Tax on entire Bill value wherever Payment is directly being made by Insurance Company.

3. Hospital is charging Service Tax on Executive/Pre recuitment health check up whever direct payment is being made by corporates.

4. Hospital is constructing a New wing for which it is procuring construction related material and also procuring Medical Equipments by paying CVD . For construcing the Buiding Hospital is also availing Various Services like architect,structural consultant,civil work,Plumbing etc.

5. For day today operations Hospital is procuring medicines,consumables,medical equipment Laboratory Equipments,office Equipments /Ambulance and other Capital Goods .

6. Hopital is also receving Services like Security Services, Canteen, Telephone etc.

7. Is the Hospital eligible for Cenvat Credit on 100 % Excise Duty /CVD wrt to Capital goods.

8. 80% of Billing is for Taxable Services and 20 % for Non Taxable Services.For Inputs material and Services Hospital wants to take proportionate credit for Taxable Services at the end of each month.

9. Based on above scenario is the understanding for taking CENVAT Credit as per point no. 8,9 is correct.

Replies (3)

RAMESH KUMAR VERMA

CS PURSUING

28836 Points Posted on 08 February 2011

mr. rajeev,

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.

rajiv

self

60 Points Posted on 08 February 2011

Shall be grateful for a detailed and pointwise reply.

Has any hospital started availing cenvat credit for inputs/services/capital goods.

jimit shah

22 Points Posted on 17 April 2011

Can any one help me with my problem??

Service tax on health services is applicable w.e.f 1/7/2010.... so can we get cenvat credit for the services provided before 1/7/2010.???

My knowledge on service tax says cenvat credit for servoces provided before 1/7/2010 should not be taken but im not finding any provisions relating this...so plzzz help...