Fortis Not Liable To Pay ₹50 Lakh Service Tax On Facilities Provided To Visiting Doctors: CESTAT Chandigarh

The Chandigarh Bench of the Customs, Excise and Service Tax Appellate Tribunal has recently held that Fortis Healthcare is not liable to pay service tax on infrastructure and administrative facilities provided to visiting doctors.

A coram of Judicial Member S.S. Garg and Technical Member P. Anjani Kumar said the arrangement was part of delivering medical treatment and not a separate taxable service.

Allowing the appeal, the tribunal held that such services “do not fall under the category of 'Business Support Services' rather the said services fall under the category of 'Health Care Services' which are exempt from the payment of service tax.”

The dispute arose from agreements under which specialist visiting doctors treated patients at Fortis hospitals using hospital infrastructure, while the hospital raised bills on patients and shared revenue with the doctors.

The tax department claimed Fortis was providing taxable business support to doctors and confirmed a service tax demand of Rs. 50.03 lakh along with interest and penalties.

The tribunal rejected this view, noting that hospitals engage doctors to provide healthcare to patients and not the other way around. It also held that the extended period of limitation could not be applied, as the issue involved interpretation of law and had consistently been decided in favour of hospitals across the country.

The service tax demand was set aside in full, and Fortis Healthcare's appeal was allowed.

Case Title: Fortis Healthcare Ltd. v. Commissioner of Central Excise and Service Tax, Chandigarh-II

Citation: 2026 LLBiz CESTAT (CHA) 15

Case Number: Service Tax Appeal No. 51988 of 2015

For Appellant/Assessee: Advocate Yuvraj Singh

For Respondent/Department: Advocate Anurag Kumar and Goverdhan Dass Bansal