Reportedly, the Government has turned down the request of some States to reduce the rate of tax on lotteries under the Goods and Services Tax (GST) regime.
Presently, the rate of tax applicable to lotteries run by State Government is 12 per cent. For lottery “authorised” by the state government, the tax rate is 28 per cent.
While the former is run within a state by state-owned agencies, the latter is run by private players and can be sold in states other than the organising states as well.
The States including Arunachal Pradesh, Goa, Mizoram, Nagaland and Sikkim had made a request to reduce the rates since higher rate of tax has adversely affected the lottery business in many States.
Lotteries are allowed in 14 states including West Bengal, Maharashtra, Arunachal Pradesh, Goa, Mizoram, Nagaland and Sikkim among others.
Under the old tax regime, the government used to impose service tax only on the agent’s commission, which was around 10-12 per cent of the ticket price. In the new indirect tax regime, the GST is levied on the face value of the lottery ticket at 12-28 per cent.
Sources said the new GST rates on lotteries were notified by the central government on recommendations of the GST Council and any change in these rates would require the backing of the Council. States including Kerala, Punjab has told the central government that it does not appear that GST has made any impact on the sale of lottery tickets.
