Lotteries to be taxed at 28% from March next year, votes GST Council

In an unprecedented move, the GST Council on Wednesday witnessed first-ever voting on the issue of levying tax on lotteries.

The GST Council, the highest decision making body of the new indirect tax regime,fixed 28 per cent tax rate on lottery effective March 1, 2020, news agency PTI quoted the Revenue Secretary as saying.

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 is hampering the growth of the business. (Getty Images/iStockphoto/ Representative Photo)

Under the GST Act, dual rates are imposed on lotteries. The GST rate levied on state lotteries sold within a state is 12 per cent while a 28 per cent rate is applicable on those sold outside that state.

In an unprecedented move, the GST Council on Wednesday witnessed first-ever voting on the issue of levying tax on lotteries.

During the voting, 21 states voted in favour of a uniform rate.

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 is hampering the growth of the business.

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

In a representation made to Finance Minister Nirmala Sitharaman, All India Federation of Lottery Trade & Allied Industries suggested that the GST Council could consider imposing GST on lotteries after abating the prize money component of the lottery ticket since the said amount never forms part of the income in the lottery trade.