15 June 2017
In view of differential GST rates applied on Sporting Goods and Physical Exercise i.e 12% and 28% respectively by the Hon’ble GST Council, the Traders Association of Sporting Goods and Physical Exercise Equipment (TASGPEE) appeals to the council to reconsider the GST rates for physical exercise equipment. As per global prevailing taxation practices also, TASGPEE, the key body of traders and manufacturers from across the country requested the GST Council to keep Sports goods & Physical Exercise equipment in same GST tax rate of 12%.
GST Rate of 28% implies GST Council considers exercising and fitness equipments as luxury items. They are not luxury items. For example, Athletic Equipment includes Javelin, High Jump Mat, Hurdles, Relay Baton, Spiked Shoes, etc. Gymnastics Equipment includes Parallel Bar, Parallel Beam, Roman Rings, Competition High Bar, Climbing Rope, etc. General Physical Equipment includes Yoga Mat, Yoga Bricks Skipping Ropes, Dumbbells, Weight Lifting Equipment, Gym Ball, Treadmills, Home Gym, Exercise Bike, etc.
Rate of 28% makes essential exercising and fitness equipment out of the reach of the common man. Thus, Fitness Industry, which is in nascent stage and as per industry estimates is worth around INR 500 Cr and is growing at 16-18 % annually. The Association expects GST rate of 28% could impact the sales by around 25% and people’s health.
At the 14th GST Council meeting held in Srinagar, the Hon’ble Council has fixed GST rates under Chapter 95 as below:
12%: Sports goods other than articles and equipment for general physical exercise
28%: Articles and equipment for general physical exercise, gymnastics, athletics, other sports (including table-tennis) or outdoor games, not specified or included elsewhere in this chapter; swimming pools and paddling pools.
The equipment for physical exercise and fitness are integral part of any sportsperson fitness regime. Also, it’s increasingly becoming important for people at large as the country grapples with lifestyle diseases resulting in urgent need to promote physical exercise. And it’s an established fact, regular workouts help in reducing stress, anxiety and depression and keep a host of diseases at bay.
The ‘Harmonized System of Nomenclature’ or ‘HSN’ a multipurpose international product nomenclature developed by the World Customs Organization, used as basis for custom tariffs and trade statistics also treats fitness equipment as sporting goods/equipment world-wide. The specific HSN No. 9506 followed by around 200 countries in tandem with the Member Commitment Policy of WTO have incorporated the same in their local GST or VAT laws. In key countries like United Kingdom, Australia and United States of America which also follows HS nomenclature, sports goods include physical exercise equipment etc without any kind of differential treatment.
Speaking on the issue Dr Dinesh Kapoor, President, Traders Association of Sporting Goods and Physical Exercise Equipment (TASGPEE) said “We welcome the fitment of rates of various goods approved during GST council meeting however we would like to sincerely appeal to Hon’ble council to also treat physical exercise equipment as part of sports goods with 12% GST rate. We strongly feel that India as a country has a long way to go in sports globally so it’s essential that we promote a health oriented ecosystem and society. Also, alarming rate of lifestyle diseases gripping our nation requires us to urgently promote a healthy lifestyle, for which fitness equipment plays an important role and it should not be treated as a luxury. We are hopeful that the council will take a cognizance of the issue and we humbly request it to reconsider the GST rate on fitness equipment.”
Mr Kapoor further said “With the government vision of “Khelega India, Khilega India”, it signifies that sport are the key activity for development of a human being. And after India’s proposal of International Yoga Day to United Nations, it is celebrated worldwide every year on 21st June. This also signifies India’s efforts on international stage for a healthy world, thereby we believe keeping this sentiments government will seriously consider our recommendation.”
Also, speaking on the issue, Bhupender Dhawan, Dronachaya Awardee said ‘for a sportsperson his or her fitness is the most important aspect as it the most crucial thing for their performance and career. Fitness equipment are integral part of a sportsperson’s daily life and we feel that government should consider it keeping affordable.”