Our hospital is providing medical services to the employees of Software company under a contract. The contract was signed on January 2009 to December,2010cently, in July,2010, Govt has introduced Service tax applicable to Hospitals providing medical services to Corproates and Mediclam services. This clause was not in the contract as it was signed before the introduction of service tax. When we included the service tax in our bill, the company refused to pay saying that the service tax was not in the contract, hence they cant pay the same. We argued saying that whenever Govt changes tax rates /introduces new taxes, the same will be applicable to all the corporate sector irrespective of any contract, as it is payble to the Govt directly. Their point is valid only incase of any dispute between hospital and the software company in the provision of medical services not in respect of taxes.
Can you suggest an answer?
CAclubindia
