The excise department has issued a notice to the Delhi Gymkhana Club for alleged non-payment of luxury tax.
Senior excise officials said a notice had already been served to the club, following which an order was issued. At a hearing on Thursday, the club refused to pay up, arguing that it did not come under the ambit of the luxury tax.
Sources in the department said the club had defaulted on luxury tax amounting to approximately Rs. 2 crore over the last three years. The department will issue a final order on the matter soon.
“If they refuse to pay despite our final order, strict action will be taken, including sealing of the premises,” said a senior Delhi government official.
Sources in the excise department said the club, that has approximately 40-odd rooms which are rented out, is supposed to pay luxury tax as per law. The club authorities did not respond to calls and text messages when asked for their reaction.
“They have been giving us excuses that their rooms are for members and it is a club and not a hotel. However, all clubs in the city have been making regular payments,” added the official.
In 2012, the Delhi assembly had approved the Delhi Tax on Luxuries (Amendment) Bill 2012, under which luxury tax can be imposed on banquet halls, spas, gymnasiums, health clubs and hotels that charge a minimum of Rs. 750 per day per room.