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G1-G9 filing ASP/GSP solution
Elevate processes with AI automation and vendor delight
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Optimise ITC for profitability
Bulk invoicing within any ERP
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Maximise EBITDA with early vendor payments
Instant working capital financing
Automated secretarial compliance
Connected finance ecosystem for process automation, greater control, higher savings and productivity
GST and direct tax compliance
Complete supply chain solution for ultimate control, effortless collaboration, and assured compliance
File ITR in 3 minutes
For Personal Tax and business compliances
Updated on: Jan 21st, 2025
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2 min read
GST on lottery sales has caught the attention of GST Council since the 31st GST Council Meeting. Tax revenue from the sale of lottery tickets has been a major source of Exchequer for the Government. Hence, it becomes pertinent to analyse the GST implication on the sale of lottery tickets.
‘Lottery tickets’, is actionable claim and is classified as ‘Goods’, under GST. However, an actionable claim is specifically covered under the negative list-schedule III of the CGST Act, keeping it outside the scope of GST. But there are exceptions to schedule III. Sale of Lottery tickets is one of them Hence, the sale of lottery tickets would be considered to be the supply of taxable goods and will attract GST on Lottery sales.
GST rate on the supply of lottery tickets are as follows-
*A Committee has been formed to study the differential levy of tax on the sale of Lottery Tickets on 16th Jan’19
In case of supply of lottery tickets, the value for charging GST shall be higher of the following:
The value arrived above shall be inclusive of GST.
Illustration 1: Government of Arunachal Pradesh runs a lottery gaming competition. The face value is 105. The price notified by the State is INR 112. What will be the taxable value and GST amount?
Answer: Higher of face value (105) and price notified by the State (112) is INR 112. INR 112 is inclusive of GST. The GST rate on state-run lottery programme is 12%. Thus, Price before GST = (112 * 100) / (100 + GST rate) = (112*100) / (112) = INR 100 Thus, taxable value = INR 100 GST amount = INR 12.
Illustration 2: Similarly, if the lottery would have been organised by a private player, the GST rate would be 28%. The Price before GST = (112 * 100)/ (100 + GST rate) = (112*100) / (128) = INR 87.5. Thus, taxable value = INR 87.5 GST amount = INR 24.5
The CBIC has clarified that HSN classification of the lottery shall be “Any Chapter” and tax would be paid at applicable rates (12% or 28%).
In the case of lottery run by State Government, the tickets are sold by the State Government to lottery distributor /selling agent. The selling agent is required to pay tax under reverse charge.
Subsequently, when the selling agent supplies such tickets to sub-agent, no tax is required to be paid. The local sub-agent is also not required to pay any tax. Thus, a tax is levied at single – point under reverse charge in case of lottery run by State Government. However, in the case of lottery authorised by State Government, the tax is to be paid under the forward charge by the lottery selling agent (i.e.supplier). A tax must also be paid at each stage of supply.
Supply of lottery tickets must be under the cover of tax invoice containing all particulars required in an invoice. The invoice is required to be issued with the sale of a lottery ticket. There is no relaxation in invoicing requirements for a supplier of lottery tickets.
The time of supply of lottery tickets shall be earlier of the following dates:
When a person pays the amount to participate in a lottery or to buy the lottery ticket, the amount of money paid to participate is treated as payment for supply.
Have a query?
Taxation of Distribution of Lottery Tickets under GST – ClearTax
