Withering lottery industry once again implores govt to relax GST rates
The current Goods and Services Tax (GST) structure of has crippled the lottery industry, ꦜaccording to leading lottery distributor conglomerate, .
Industry veterans believe that the GST Council’s decision has led to reduction of lottery ♍terminals and sales by almost 70%, and in case the governments fails to reconsider its decision, it would༒ result in loss of thousands of jobs and diminishing turnover, resulting in even lesser tax collections.
They point out that effective overall tax incidence of service tax and lottery tax was 6.71% on the face value in the pre-GST era whꦐereas now it is nea🌸rly 28% on the face value including prize money that is a whopping 300% increase in the tax incidence.
According to Kamlesh Vijay Group CEO of Sugal & Damani, “To sort out the differences in the views among the state’s the GST Council had constituted an eight-member Group of Ministers earlier under the Chairmanship of Maharashtra Finance Minister Sudhir Mungantiwar to look into various issues relating to GST on lottery and in the last meeting and the council decided to 🧸seek legal opi๊nion from Attorney General on the issue.
One of the main impending issues is the differential tax treatment of lotteries between State government run and State government authorized lottery. Currently 12% GST is being charged on lotteries run by State Governments (a lottery not allowed to be sold in any State other than the organizing State) directly, while a 28% tax rate is being levied on the lottery tickets authorized by sꦏtate governments (a lottery which is authorized to be sold in State(s) other than the organizing State also). This huge difference in the tax rate on the same commodity acts as a tariff barrier fo𒉰r smaller states like Goa, Sikkim, Arunachal Pradesh etc. when their tickets are sold in other bigger States like West Bengal or Kerala.
A counterproductive move was recently done by by passing a unanimous resolution u🌠rging the Central Government to wi🥃thdraw the move to bring uniform GST rate on lottery. ”
Sugal &a♕mp; Damani and other lottery companies are consequently demanding that a single GST rate and structure be levied for state-run lotteries 🔯sold through distributors or directly through the state government machinery.
They suggest that the tax rate should either be 5% of the face 🌌value of the lottery ticket or 28% of the margin retained by the lottery distributors/state government, i.e. MRP of the lottery ticket minus prize payout.
Private🐓 lottery companies have consistently and demanded a relaxation in the taxation structure for the industry, without finding much favour with the GST Council, due to strident opposition from the Kerala government.
