The bank accounts of the elite Gymkhana Club were seized on Tuesday by the Delhi government for alleged non-payment of luxury tax.
The Commissioner (Excise and Luxury Tax) JB Singh said that Gymkhana Club has defaulted on paying luxury tax of Rs. 2.92 crore. HT had first reported about the club being served a notice on June 27.
"We had served them notices in the past. An order was issued on July 1 asking the club to pay the tax within seven days. But the club failed to pay the tax and has not complied with the order. We have passed the orders for civil recovery under which freezing of three bank accounts has been done for recovery of the tax," said Singh.
The membership of the club is highly sought after by Delhi's powerful elite - fresh applicants can become members only after 35 years.
Singh also informed that the excise department has simultaneously started the process to recover the amount as arrears of Land Revenue.
The amount - 2.92 crore is their tax liability for the last three years. The department has already given directions to the manager of the three nationalised banks to withhold the amount and remit it to the department's account.
According to the Delhi government officials, on Monday the department had issued a notice to the Club to deposit the amount failing which coercive action under the Delhi Land Reforms Act 1984 would be initiated which means process of filing an FIR can be initiated against the Club for the purpose of recovering the luxury tax.
"Despite repeatedly asking the Delhi Gymkhana Club to register under the Delhi Tax on Luxuries Act, 1996, they have not registered themselves. They are providing accommodation, rooms and deluxe suites for monetary consideration and thus they are liable to pay tax," said a senior official. The club authorities did not respond to calls and text messages when asked for their reaction.
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.