State-run lotteries also liable to pay 28% GST from 1 March
24 February 2020
States using lotteries as a major revenue source will be hit hard with the decision of the GST Council to impose 28 per cent Goods and Services Tax (GST) on state-run lotteries, on a par with state-authorised lotteries.
At present, a state-run lottery attracts 12 per cent GST, while a state-authorised lottery attracts 28 per cent tax.
The GST Council had in December 2019 decided to impose a single rate of 28 per cent on state-run and authorised lotteries. “A 28 per cent Goods and Services Tax (GST) will be levied on lotteries from March 1,” says a revenue department notification.
The revenue department notified the GST rate on supply of lotteries and amended its earlier Central Tax (Rate) notification.
Accordingly, the Central Tax rate for supply of lotteries has been amended to 14 per cent and a similar percentage will be levied by the states. This will take the total GST incidence on lotteries to 28 per cent.
“This notification shall come into force on the 1st day of March, 2020,” the revenue department notification said.
Currently, a state-run lottery attracts 12 per cent GST, while a state-authorised lottery attracts 28 per cent tax.
There were demands that a uniform tax rate should be imposed on lotteries following which a group of ministers were set up to suggest the GST rate. Following this, the GST Council in December voted for a single rate of 28 per cent on supply of lotteries.