No immediate resolution over GST on lottery

The lottery industry has been pressing for a uniform GST rate of 12 per cent and removal of tax on the prize money.
For representational purposes
For representational purposes

NEW DELHI: AS the Goods and Services Tax (GST) Council will meet on September 20 in Goa, the issue of tax rate over lottery is unlikely to be resolved despite the industry pitching for a uniform rate of 12 per cent. States such as Kerala and West Bengal are against this proposal as it would result in revenue loss for these states.

Currently, all lotteries are organised by states as per the provisions of Lottery Regulation Act 1998. A GST rate of 12 per cent is levied on state lotteries sold within a state and 28 per cent on those sold outside that a state. Currently, lotteries are permitted in about 10 states, including Maharashtra, West Bengal, Punjab and Arunachal Pradesh.

The lottery industry has been pressing for a uniform GST rate of 12 per cent and removal of tax on the prize money, saying the existing dual-rate system is hampering the growth of the business.

The levy of GST is on the face value of lottery tickets, including the prize money awarded to winners. The lottery industry players claim that before the GST was levied on tickets, around 90 per cent would go for the price payment for a Rs 100 ticket but post the GST implementation, only 60 per cent of the prize money is paid to the winner, which has made the business less attractive.

To sort out the differences, the GST Council had constituted an eight-member group of ministers under the chairmanship of Maharashtra Finance Minister Sudhir Mungantiwar.

The council had met several times but there had been a deadlock over this as states like Kerala and West Bengal are against this move. Their argument is that it would result in revenue loss to the states.

Sensing the deadlock, the council has now decided to seek the help of the Attorney General over the issue, trying to find out a legal solution in this case.

Panel formed to sort out issues

The GST Council had constituted an eight-member group of ministers under the chairmanship of Maharashtra Finance Minister Sudhir Mungantiwar to sort out the differences, but there had been a deadlock as few states were against it

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