A 28 per cent Goods and Services Tax (GST) will be levied on lotteries from March 1, according to a notification. The GST Council had in December last year decided to impose a single rate of 28 per cent on state-run and authorised lotteries. 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 1stday 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.
- Gambling in the form of Lottery has been allowed in a few states, where it has penetrated at grass root levels, now changing the tax rate from a prospective date would help the dealers in effectively implementing the new tax rate.
- Uniform rate on lottery brings a parity between state-run and authorized lotteries; thereby aligning an equal footing for businesses in the same line.