Sports Goods Needed By Sports Persons To Maintain Themselves Physically Taxable At Concessional Rate Under VAT Act: Andhra Pradesh High Court
The Andhra Pradesh High Court has held that sports goods that are needed by sports persons to maintain themselves physically would fall under Entry 60 of the IVth Schedule, to the A.P.VAT Act, attracting tax at the rate of 5%.
The Court was considering a Writ Petition seeking a direction to Authorities to grant a concessional rate for the sports equipment.
The division bench of Justice R. Raghunandan Rao and Justice BVLN Chakravarthi observed, “….the fact remains that every sports person has to maintain physical fitness and the goods mentioned are used for maintaining such physical fitness. In such circumstances, the goods mentioned above would also answer the description of sports goods as these goods are needed by sports persons to maintain themselves physically and to achieve the necessary physical fitness to participate in any physical sport.”
The Petitioner was represented by Advocate G V S Ganesh, while the Respondent was represented by Government Pleader for Commercial Tax.
Facts of the Case
The Petitioner, a dealer in Gym Equipment, registered under the A.P. Value Added Tax Act and Central Sales Tax Act was paying tax at the rate of 5% on the sale of goods, by classifying the goods sold by him under Entry-60 of Schedule-IV of the AP VAT Act. The Petitioner filed his returns, under the Central Sales Tax Act and the 5th Respondent passed the assessment orders against the Petitioner in relation to various assessment periods.
The 5th Respondent took the view that the Petitioner was not eligible for the concessional rate of 2%, as necessary C-Forms and F-forms have not been filed and the rate of tax applicable to goods, under the State Act would be applicable. It also took the view that the goods sold by the Petitioner do not fall under Entry-60 of Schedule-IV of the A.P. VAT Act and would have to be treated as unspecified goods under Schedule-V, which would be amenable to tax at the rate of 14.5%.
Counsel for the Petitioner submitted that the goods sold by the Petitioner, even according to the 5th Respondent, are weight lifting equipment, dumbbells, treadmill, rotators and fit kit exercisers related to sporting activity and consequently, the Petitioner was entitled to treat the said goods as falling under Entry-60 of Schedule-IV. He contended that the view that these goods are not associated with any specific sport and consequently cannot be treated as sports goods, is not based on any proper logic.
On the other hand, Government Pleader contended that the equipment mentioned are general fitness equipment and do not relate to any specific sports. He submitted that the goods in Entry-60 would have to be the goods associated with a specific sport before they can be treated as goods falling under that Entry.
Reasoning By Court
The Court at the outset observed that weight lifting equipment, is connected to the sport of weight lifting and would therefore qualify to be treated as sports goods, even according to the interpretation placed by the 5th respondent that only goods which are directly associated with a sport can be treated as sports goods.
It stressed that though other goods, such as treadmill, dumbbells, rotators and fit-kit exercise kit cannot be associated with any one specific sport, the fact remains that every sports person has to maintain physical fitness and the goods mentioned are used for maintaining such physical fitness.
“………The matters are remanded back to the Assessing Officer for passing fresh orders, after treating the goods in question, as goods falling within Entry-60 of Schedule-IV to the A.P. VAT Act. There shall be no order as to costs,” the Court observed.
The Petition was accordingly allowed.
Cause Title: M/s Acme Fitness Pvt Ltd vs. The State Of AP and Others
Appearances:
Petitioner– Advocate G V S Ganesh, Advocate G. Tuhin Kumar
Respondent– Government Pleader for Commercial Tax
