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TMI Blog2013 (1) TMI 606X X X X Extracts X X X X X X X X Extracts X X X X ..... ts allowed to stay in A/C cottages, A/C rooms and non A/C rooms attached to the club. The appellant has no dispute with regard to the club's liability to pay luxury tax payable under section 4(2A) of the Kerala Tax on Luxuries Act, 1976 ( hereinafter referred to as the Act) which is at the rate of Rs. 100/- per member per year, which is collected from the members. However dispute is only with regard to the luxury tax demanded for the rent and other charges collected from guests residing in the above referred rooms and cottages attached to the club except on charges of food and liquor. According to the appellant the liability for luxury tax on room rentals and other charges for accommodation and facilities provided therein is applicable ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... r amenities and services provided in a hotel or house boat or hall or auditorium or kalyanamandapam or place of like nature [the rate of charges of accommodation for residence and other amenities and services provided excluding charges of food and liquor is one hundred and fifty rupees per day or more]. Section 4. Levy and collection of luxury tax:- (1) Subject to the provisions of this Act, there shall be levied and collected a tax, hereinafter called the 'luxury tax', in respect of any luxury provided,- (i) in a hotel, house boat, hall, auditorium or kalyanamandapam or including those attached to hotels, clubs, Kalyanamandapam and places of the like nature which are rented for accommodation for residence or used for condu ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... to the club answer the description of "hotel" within the meaning of Section 2(e) of the Act attracting liability for luxury tax. Admittedly the tariff charged by the appellant for the cottages and guest rooms attached to the club are above the limit that attracts luxury tax under the Act, if the collections attract tax applicable to hotel rooms. The contention raised by Senior counsel for the appellant is that unless accommodation is provided in the building as part of business against collection of rent, the building cannot be called "hotel". However, what we notice is that the "hotel" as defined under the above provision of the Act has a wide meaning because Explanation covers even guest house run by the Government or a company or a corpo ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... profit by renting out cottages and rooms to it's members or to members of affiliated clubs, and such profit of the club will ultimately go to the benefit of the members. We are, therefore, of the view that cottages and rooms attached to clubs answer the description of "hotel" attracting tax under Section 4(2) (a) of the Act. In fact, even though hotels are run as a business activity for earning profit, for the purpose of levy of luxury tax there is nothing to indicate that the hotel should in fact make profit from the sales and all what is required to prove is that the rooms are rented out in excess of the charges provided in the Act attracting liability for luxury tax. The principle is same for cottages and rooms attached to clubs by ..... X X X X Extracts X X X X X X X X Extracts X X X X
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