Treadmills & Other Gym Equipment Qualify As 'Sports Goods' Under Entry 60 Of A.P. VAT Act: Andhra Pradesh High Court

While allowing a writ petition of a dealer of gym equipment who contended that such equipment related to sporting equipment, a Division Bench of Justice R. Raghunandan Rao and Justice B.V.L.N. Chakravarthi, explained,

“Weight lifting equipment, is connected to the sport of weight lifting and would therefore qualify to be treated as sports goods, even according to the interpretation placed by the 5th respondent that only goods which are directly associated with a sport can be treated as sports goods. The other goods, such as treadmill, dumbbells, rotators and fit-kit exercise kit cannot be associated with any one specific sport. However, the fact remains that every sports person has to maintain physical fitness and the goods mentioned are used for maintaining such physical fitness. In such circumstances, the goods mentioned above would also answer the description of sports goods as these goods are needed by sports persons to maintain themselves physically and to achieve the necessary physical fitness to participate in any physical sport.”

Background

The petitioner was a dealer in gym equipment registered under the A.P. Value Added Tax Act and the Central Sales Tax Act and paid taxes at the rate of 5% on the sale of goods. His goods were classified under Entry-60 of Schedule-IV of the AP VAT Act. He had filed his returns under the Central Sales Tax Act, and the Assistant Commercial Tax Officer (Respondent 5) passed the assessment orders against the petitioner in relation to various assessment periods. However, Respondent 5 alleged that the petitioner was not eligible for the concessional rate of 2% as necessary C-Forms and F-forms were not filed. Additionally, the rate of tax applicable to goods under the State Act was also made applicable. While the petitioner contended that the goods fell under Entry 60 of the IVth Schedule to the A.P. VAT Act, which attracted tax at the rate of 5%, Respondent 5 alleged that that the goods sold by the petitioner do not fall under Entry-60 and would have to be treated as unspecified goods under Schedule-V, which would be amenable to tax at the rate of 14.5%.

The petitioner primarily was dealing in sale of weight lifting equipment, dumbbells, treadmill, rotators and fit- kit exercisers, and it was his case that as all these equipment related to sporting activity, he was entitled to tax liability as per under Entry-60 of Schedule-IV.

Contrary to this, the respondents argued that the equipment sold by the petitioner were general fitness equipment and do not relate to any specific sports and goods in Entry-60 would have to be the goods associated with a specific sport before they can be treated to be goods falling under that Entry.

For reference, Entry-60 of Schedule-IV to A.P. VAT Act, reads as:

“Entry-60:- Sports goods excluding apparels and footwear.”

The Division Bench was of the opinion that while weightlifting equipment pertained to the sport of weightlifting, the other gym equipment in question were used by sportsmen to maintain the requisite physical fitness which their respective sport demands, and hence, would also fall within the ambit of “sports goods”.

The Court made reference to a judgment of the High Court of Uttarakhand at Nainital, M/s. Bhatia Sports Company vs. The Commissioner, Commercial Tax, Uttarakhand, [Commercial Tax Revision No.12 of 2013, dated 11.03.2022], which had followed on the judgment of the High Court of Allahabad in Cosco Industries Ltd., vs. State of U.P. & Ors [2009 NTN (Vol. 40)], and held that “fitness exercises are also held to be goods relating to sports and games”

Accordingly the Court allowed the writ petitions and set aside the assessment orders of Respondent 5. Further, the Court remanded the matters back to the Assessing Officer for passing fresh orders, after treating the goods in question, as goods falling within Entry-60 of Schedule-IV to the A.P. VAT Act.

Case Details:

Case Number: W.P.NOs: 7514 of 2020, 20411, 20429 & 20551 of 2021

Case Title: M/s Acme Fitness Pvt Ltd v. The State Of AP and Others

Date: 09.05.2025

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