Members of the tony DLF Golf and Country Club in Gurgaon received a shock last month when they read an e-mail from the club that said that the ‘Haryana government has levied and started collecting 25 per cent Entertainment Duty under the Punjab Entertainment Duty Act 1955, as made applicable to the state of Haryana on the various golf resorts/golf activities situated/conducted throughout the state of Haryana’.
It went further to say that this duty is to be collected with retrospective effect for the period between 2003 and 2009 and that it is being levied on membership fee, subscription fee, cart fee, caddy fee, rentals of clubs etc. It added that it had challenged the order before the Punjab and Haryana High Court, which did not entertain the matter. So, it will now approach the Supreme Court.
In the flurry of e-mail exchanges and telephone conversations among club members that followed, some of the points that were made are as follows :
The government learnt that some golf clubs were letting out their premises for weddings, entertainment shows and other events. Rather than taxing only such events, it has included golf-related activities, a sport and not ‘entertainment’. Members of these clubs don’t benefit from such revenues. So, they are needlessly being penalised.
Golf is no longer a sport only for the affluent. Witness the number of middle-class people who pay a nominal fees to play on public courses in various parts of India. By imposing taxes on the game, the government is discouraging our youth from taking up a game that’s bringing international laurels, thanks to stalwarts like Jyoti Randhawa and Jeev Milkha Singh, to the country.
It’s not clear why golf has been singled out for unfair treatment. Why shouldn’t swimming pools, badminton courts, basketball courts and cricket pitches also be taxed?
Why is the government levying a tax on activities that are good for the environment and health of the citizens? Golf courses are the only green covers amid the ugly urban sprawl.
It is known that golf courses are expensive to maintain and membership fee alone doesn’t help clubs. This is why they rent facilities for other non-golfing activities. By levying high taxes on this, the government is discouraging the use of golf clubs.
How will the government recover taxes with retrospective effect from members who have left the club? Levying taxes only on a few loyal members and not on others would be highly discriminatory.
Some members of golf clubs use only non-golf facilities such as swimming pools, squash courts, tennis courts etc. Does the government propose to monitor the activity of each member and tax them only when they use the club to play golf?
A tax of 25 per cent, higher than any other tax rate, implies that the activity is believed to be undesirable and, so, falls in the same category as smoking or gambling. Surely, golf and golfers deserve better treatment!