Surat: The State Goods & Services Tax (SGST) department has launched an investigation into a fitness and entertainment club in the upscale Vesu area of the city for allegedly not paying the full 18% GST on membership fees. Following a preliminary inquiry, the department issued a recovery demand notice of ₹35 lakh to the club operators.

Officials from the SGST department visited the under-construction club, developed by a well-known builder group, and conducted an on-site investigation today. Based on computer entries and manually recorded details, they calculated a tax evasion of ₹35 lakh.

The department had received information that, instead of collecting the full membership fee in one payment, the club was accepting fees in weekly installments and paying lower GST in parts. The investigation revealed that approximately 90% of members had paid their fees in installments rather than as a lump sum.

According to SGST officials, the club had set the annual membership fee at ₹2.75 lakh, but the full 18% GST was not being paid. When the department examined the accounts, discrepancies were found due to the installment payment system. The club management stated that they had not received the complete membership amount, and therefore the remaining tax is yet to be paid. DeshGujarat