GST council levies 28 per cent tax on lotteries

New Delhi, Dec 19 (KNN) The Goods and Services Tax (GST) Council, in its 38th meeting, decided on a single rate of 28 per cent on both state-run and private lotteries which would be applicable from March 1, 2020.

The tax is levied on the face value of the lottery tickets, inclusive of the prize money to be distributed to the winners, margin of agents, retailers and distributors.

This is the first time that the Council arrived at a decision through voting since it was constituted.

"Every attempt was made to keep that set tradition alive, every attempt was made to convince based on opinion making in the house but eventually the Council was reminded what the rules allow, and that tradition was not part of the rulebook. And the rules are what should govern the Council..." Finance Minister Nirmala Sitharaman said.

“I took the sense of the house … and we went ahead with the decision to have a vote. So, it is not enforced by the council, or by me as the chair,” she added.

Presently, lotteries run by state governments attract 12 per cent GST, while those authorised by them and sold outside the state are taxed at 28 per cent.

"The data will be analysed and a decision will be taken on it later," Sitharaman avowed.

All states agreed that it wouldn't be prudent to increase rate due to present economic crisis. The Council is unlikely to go for a rate hike or a major rejig at the moment.

The Centre had on Monday released Rs 35,298 crore as compensation to states. “There's no gap (in communication) within the council. In the council and in the Rajya Sabha, I have explained in detail how we remain committed to cooperative federalism and to honour the promises given on GST,” she said.

---------------------