GST council to decide on lowering tax rate for lotteries on 10th January

The GST Council, a constitutional body comprising of representatives from the central and state governments, is set to discuss the reduction and rationalisation of Goods and Services (GST) rate on lotteries at its next meeting that will be held on 10th January, 2019, as per news reports.

The tax rate on lotteries has been one of the most contentious issues that has been debated for several hours in the GST council. Currently, state run lotteries are charged a 12% tax on the face value of lottery tickets, while lotteries operated through private distributors are subject to a 28% levy.

In October this year, the Calcutta High Court upheld the levy of GST on lotteries and the taxation structure adopted by the GST council. The court rejected the plea filed by M/s. Teesta Distributors, a private lottery distributor.

In the previous GST council meeting held last month, the Kerala government vociferously argued against changing the GST rates on lotteries marketed by private companies, leading to a committee being formed to examine the issue and deferment of any decision on the matter.

Private lottery companies have argued that the dual rate of taxation on lotteries goes against the basic premise of unification of taxes under a common regime. They have further protested against the GST rate and said that the 28% tax on privately marketed lotteries is draconian and will led to closure of their business.

Offices of private lottery distribution companies and lottery outlets have been raided by tax and law enforcement authorities, multiple times in the past one year for underpaying or evading taxes.