Luxury tax on gyms, spas, banquet halls proposed- Business News
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Delhi govt plans luxury tax on gyms, spas

The provision to levy luxury tax on banquet halls, gymnasium and spas has been made in the Delhi Tax on Luxuries (Amendment) Bill, 2012 which was introduced by Chief Minister Sheila Dikshit in the assembly.

 PTI   
  • New Delhi,  June 7, 2012  
  • |  
  • UPDATED   08:09 IST

A massage at a spa, exercising at a gymnasium and booking a banquet hall for marriage could cost you more with Delhi Government on Tuesday proposing to levy luxury tax on them.

The provision to levy luxury tax on banquet halls, gymnasium and spas has been made in the Delhi Tax on Luxuries (Amendment) Bill, 2012 which was introduced by Chief Minister Sheila Dikshit in the assembly.

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As per the Bill, banquet halls, gymnasium and spas having an annual turnover of Rs five lakh will have to pay luxury tax on their services.

The luxury tax will be also levied on hotel accommodation with tariff of Rs 750 or more per day per room.

Though the Bill did not specify the quantum of the tax, officials said up to 15 per cent tax would be levied to be on the services.

The government estimates to collect an additional revenue of Rs 15 crore annually from the new services being brought under the luxury tax.

The luxury tax on banquet halls, gymnasium, spas and hotel accommodation would be in excess of the VAT on them.

"It has been observed that luxuries services and facilities provided in banquet halls, gymnasiums/health clubs and spas should have been brought under the ambit of the Delhi Tax on Luxuries Act as these services are availed by the affluent strata of the society," said Dikshit, who also holds the finance portfolio.

Dikshit said in order to augment the luxury tax base, government decided to impose the tax on hotel accommodation with tariff Rs 750 and more per room per day," she said.