Voting at GST Council to decide on tax on lottery

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Voting at GST Council to decide on tax on lottery
New Delhi, Dec 18 () In an unprecedented move, GST Council - the highest decision making body of the new indirect tax regime - on Wednesday witnessed first-ever voting on the issue of levying tax on lotteries as states expressed divergent opinions.

Decisions in the previous 37 meetings of the GST Council, headed by Union Finance Minister and comprising of representatives of all states and UTs, had been taken unanimously. These included fixing of tax rates on dozens of goods and services but never had voting done to decide on the issue.

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However, when the issue of levy of GST on lottery came up at the 38th meeting of the Council, consensus eluded, sources said. This led to a vote being taken to decide on the issue by a majority.

Sources said a uniform rate of 28 per cent GST rate will now be applicable on lotteries from March 1.

Currently, dual GST rates are imposed on lotteries.

As many as 21 states voted in favour of 28 per cent GST rates as opposed to 7 against it, they said.

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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.

Currently, a GST of 12 per cent is levied on state lotteries sold within a state and 28 per cent on those sold outside that state.

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.

The Council in its July meeting had also decided to seek a legal opinion from the Attorney General on the issue.

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. DP ANZ BAL
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