Service Tx on Health Care services

This is with reference to budget announced and Finance Bill produced by Finance Minister of India in the Lok Sabha. In his Budget speech Mr. Finance Minister announced that Services provided by a clinical establishment or by a doctor not being an employee of a clinical establishment, who provides services from such premises for diagnosis, treatment or care of illness, disease, injury, deformity, abnormality or pregnancy in any system of medicine will be taxable.

Chapter V of finance bill defines clinical establishment as-

Clinical establishment means-

i)                    A hospital, maternity home, nursing home, dispensary, clinic,  sanatorium or an institution, by whatever name called

Ø       Owned established, administered or managed by

Ø       Any person or body of persons, whether incorporated or not

Ø       having in its establishment the facility of central air conditioning either in whole or in part of its premises and

Ø       having more than twenty five beds for in patient treatment at any time during the financial year,

Ø       offering services for diagnosis, treatment of care for illness, disease, injury, deformity, abnormality or pregnancy in any system of medicine; or

ii)                   An entity

Ø       Owned established, administered or managed by

Ø       Any person or body of persons, whether incorporated or not

Ø       Either as an independent entity or

Ø       As a part of any clinical establishment referred to in clause (i)

Ø       Which carries out diagnosis of diseases through pathological, bacteriological, genetic, radiological, chemical, biological investigations or other diagnostic or investigative services

Ø       with the aid of laboratory or other medical equipments,

but does not include an establishment owned or controlled by the government or a local authority.

We a well known group of Industries in India, having two health care establishments, wants to know your opinion regarding whether we will be covered in the above said insertion in the finance bill? Whether Service Tax will be applicable on us? Which establishment will be covered and which will not be covered and on what grounds?

Details of our health care institutes are given below.

1. Nature Cure Institute-

We have a Nature Cure Institute. In which we provide accommodations also to the patients. All paid accommodations are air conditioned through room air conditioner but we do not have any centralized air conditioning facility. Free wards are non air conditioned. Number of beds is near about 250. There is no any allopathic, unani, ayurvedic, or homeopathic system of medicine is being followed. Only naturopathy, yoga and acupuncture are used as system of medicine. There is diagnostic facility also.

2. Charitable Hospital-

We have a charitable hospital in which we provide treatment to weaker section of public free of cost or at concessional charge. Accommodations are not provided in this hospital. Allopath is followed as a system of medicine in this hospital. Diagnostic services have also been provided in this hospital.  

No reply received yet. Please treat it as urgent.