"Health and Fitness Service" means service for physical well being such as, sauna and steam bath,

Indian Service Tax

Health Club And Fitness Service

Effective Date: 16/08/2002.

Authority: Notification No. 8/2002-ST, dt. 1/8/2002 (for full text of Notification see under'Beauty Parlour').

Rate of Service Tax: 8% from 14/5/2003 (5% upto 13/5/2003). 10% from 10/9/2004 - Cess 2% of 10% = 0.2. Total ST = 10.2%.

Definitions

"Health and Fitness Service" means service for physical well being such as, sauna and steam bath, turkish bath, solarium, spas, reducing or slimming saloons,gymnasium, yoga, meditation, massage (excluding therapeutic massage) or any other like service, [Section 65(51)]

"Health Club and Fitness Centre" means any establishment, including a hotel or a resort, providing health and fitness service, [Section 65(52)]

Taxable service: Health and fitness service provided by health clubs and fitness centres for physical well-being (excluding therapeutic massage).

Value of taxable service: Gross amount received by health club or fitness centre from customers.

Exemptions

• Therapeutic massage, acupressure therapy, medical therapy

• Institutes imparting diploma in yoga

• Naturapathy, Ayurveda

• Sports centres

Person liable to pay: Health Club and Fitness Centre.

Head of Account

S1.Code SCCD Minor-head 004400151 Health Club and Fitness Centres Services 00440204 Sub-head 00440015101 Tax Collection 00440205 119 Sub-head 00440015102 Other Receipts 00440206 110 Sub-head 00440015103 Deduct Refunds 00440207 111

Main text of Departmental Circular/TN

F. No. Bll/1I2002-TRU, Date: 01/08/2002

• The section referred to hereinafter are the sections or clauses of the Finance .Act, 1994 as amended by the Finance Act, 2002. Reference to sub­clause or clause means clause or sub-clause of Section 65 of the Finance Act, 1994 as amended by the Finance Act, 2002.

• As per clause (42), "health and fitness service" means physical well being service such as, sauna and steam bath, turkish bath, solarium, spas, reducing or slimming salons, gymnasium, yoga, meditation, massage (excluding therapeutic massage) or any other like service. As per clause (90)(zw), the taxable service is any service provided to any person, by a health club and fitness centre in relation to health and fitness service. "Health club and fitness centre" means any establishment including a hotel or a resort providing health and fitness service.

• Health and fitness services are provided by clubs, fitness centers, health saloons, hotels, gymnasium and massage centers. The services which fall under this category might be for weight reduction and slimming, physical fitness exercise, gyms, aerobics, yoga, meditation, reiki, sauna and steam bath, Turkish bath, sun bath and massage for general well being. However therapeutic massage does riot come in the ambit of taxable service. Therapeutic massage basically means a massage provided by qualified professionals under medical supervision for curing diseases such as arthritis, chronic low back pain and sciatica etc. Ayurvedic massages, acupressure therapy, etc. given by qualified professionals under medical supervision for curing diseases/disorders will come under the category of therapeutic massages. If the massage is performed without any medical supervision or advice but for the general physical well being of a person, such massages do not come under the purview of therapeutic massages and they would be liable to service tax.

• A point has been raised as to what would be the value of taxable service in case where clubs and fitness centers charge a monthly/periodic amount as membership fee and only members are allowed to avail their services. It is clarified that membership fee charged by the club is in lieu of service provided and therefore in such cases service tax would be leviable on periodic/monthly membership fee.

• Another point relates to service tax on membership fee already collected. It is clarified that no service tax will be payable on membership fee already collected prior to the date on which the new service tax has come into force.

• Certain recognized institutes impart diploma courses in. yoga. A point has been raised as to whether service tax is leviable on such institutes. It is clarified that such institutes and research center do not fall in the category of health club and fitness center and accordingly would not be liable to service tax.