The Andhra Pradesh High Court has declared that gym equipment such as treadmills, dumbbells, rotators, and fit-kit exercise kits qualify as “sports goods” under Entry 60 of Schedule-IV of the A.P. Value Added Tax (VAT) Act. This interpretation brings tax relief for fitness equipment dealers by categorizing such items under a lower tax bracket.
The judgment came from a Division Bench comprising Justice R. Raghunandan Rao and Justice B.V.L.N. Chakravarthi while hearing a group of writ petitions filed by M/s Acme Fitness Pvt. Ltd., a dealer in gym equipment. The company had been paying 5% tax by classifying its products under Entry 60. However, the Commercial Tax Department disputed this classification and reassessed the goods under Schedule-V, which attracts a higher tax rate of 14.5%.
“Weight lifting equipment, is connected to the sport of weight lifting and would therefore qualify to be treated as sports goods,” the court noted. It further explained that although equipment like treadmills and dumbbells aren't linked to any single sport, they are crucial for athletes to maintain fitness—an essential component for any sport.
The bench considered that even by the respondents’ interpretation—that only goods directly related to a specific sport qualify—weightlifting equipment would clearly be sports goods. However, they emphasized that the broader purpose of physical fitness is central to sports, thereby extending this interpretation to all fitness-related gym equipment.
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The petitioner's argument was supported by previous legal precedents. The court referred to a 2022 decision from the Uttarakhand High Court in M/s. Bhatia Sports Company vs. Commissioner, Commercial Tax, which in turn had followed an earlier ruling by the Allahabad High Court in Cosco Industries Ltd. vs. State of U.P. In those rulings, fitness and exercise equipment were also recognized as sports goods.
“Fitness exercises are also held to be goods relating to sports and games by the aforesaid judgment,” the Uttarakhand High Court had stated.
The Andhra Pradesh High Court also addressed a procedural concern. Initially, classification of goods under the VAT Act was aligned with HSN codes from the Central Excise Act. Although this alignment was repealed through a government order in 2013, the court clarified that HSN codes cannot be the sole determinant in tax classification anymore. Instead, the purpose and usage of goods must be analyzed afresh.
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With this reasoning, the bench rejected the argument that the absence of association with a specific sport disqualified fitness equipment from being termed as sports goods.
“The goods mentioned are used for maintaining such physical fitness. In such circumstances... these goods are needed by sports persons to maintain themselves physically and to achieve the necessary physical fitness to participate in any physical sport.”
Based on these findings, the court set aside the disputed assessment orders and remanded the cases back to the Assessing Officer. The officer was directed to issue fresh orders treating the equipment as sports goods under Entry 60.
Case Title: M/s Acme Fitness Pvt Ltd v. The State Of AP and Others
Case Number: W.P.NOs: 7514 of 2020, 20411, 20429 & 20551 of 2021
