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Timeshare Sellers under Tax Scanner

Published: 28th May 2015 06:02 AM  |   Last Updated: 28th May 2015 06:02 AM   |  A+A-

KOCHI: After launching a crackdown on e-commerce companies for tax evasion, the Commercial Taxes Department, for the first time, has initiated a drive against  firms that provide ‘timeshare’ accommodation service.

The Commercial Tax Intelligence Wing, South Zone, has imposed penalties on some of the major resorts in the state, including Mahindra Holidays and Resorts India Ltd (Club Mahindra) at Chinnakanal in Idukki and Sterling Homes Pvt Ltd, Munnar, for luxury tax evasion. A penalty of `11 crore was imposed on Club Mahindra, while Sterling Homes was slapped with a fine of `1.54 crore, for evasion of tax in the 2013-14 fiscal year.

“They collect huge amounts as ‘advance’ from customers for services called ‘vacation ownership/timeshare sales’ and permit them to stay free of cost for certain days.  But, it was found that hotels were not paying luxury tax, even after collecting occupancy charges in advance from customers,” sources said. 

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