KOCHI: The timeshare/vacation ownership has no legal validity according to officials of the Commercial Taxes Department.
Timeshare accommodation, according to them, is not supported by the Indian Easement Act-1882, Transfer of property Act-1857, and the Kerala Building (Lease and Control) Act-1965.
In ‘timeshare sales’ the hotels/resorts collect advance rent/occupancy charges that come under the purview of luxury tax.
Penalty was imposed on the defaulting resort operators as they were found to be collecting amounts from customers but not paying any luxury tax to the government .
“Club Mahindra has classified their guests into four categories - Long Term Holders, Marketing, House Use and Others - for providing accommodation in their facilities.
“From the classification, it is clear that the firm is not providing accommodation to it’s customers free-of-cost. It collects tax in advance for providing accommodation ,” Commercial Tax Deputy Commissioner V Satheesh told ‘Express’
“In addition to the fees collected in advance, the firm collects annual maintenance fee and utility charges from the customers,” he added .
Meanwhile, Club Mahindra officials said that it was not legal to impose fine the way it was being done.
They said they would face the Department’s action legally.