Luxury tax liability arises when a club provides prescribed luxuries for consideration, not only on actual member use.

Luxury tax under section 3D of the Karnataka Tax on Luxuries Act, 1979 arises on the club's provision of prescribed luxuries to members who are required to pay the relevant fee, deposit, donation or similar charges. The charging event is the furnishing of the luxury for consideration, not the member's actual use or consumption of each facility. The text applies the settled rule that clear and unambiguous statutory language must be given its ordinary meaning, and treats the taxable nexus as satisfied by provision of the luxury itself. On that basis, actual utilisation by members is not a condition for taxability.

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Issues: Whether the liability to pay luxury tax under section 3D of the Karnataka Tax on Luxuries Act, 1979 arises when a club provides luxuries to its members who are required to pay fee or only when the members actually use the luxuries and pay the fee.

Analysis: Section 3D levies and collects tax on luxuries provided in a club to members who are required to pay fee, deposit, donation or similar charges. Explanation I defines luxuries as more than one of the specified facilities, and Explanation II deals with corporate memberships. On a plain reading, the charging event is the provision of luxury for consideration, not actual utilisation by each member. The Court applied the settled rule that where statutory language is plain and unambiguous, effect must be given to its ordinary meaning. Reliance was placed on the principle that the taxable event for luxury tax need not depend on actual consumption or use, and that legislative competence extends to taxing the provision of luxury itself where the nexus with the subject of taxation exists.

Conclusion: The liability to luxury tax under section 3D arises when the club provides the prescribed luxuries to members who are required to pay the prescribed charges, and not only upon actual use of those luxuries by the members.

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