Lady Luck gets dearer! GST hiked to 28% on lotteries

The Goods and Services Tax (GST) Council led by Finance Minister Nirmala Sitharaman has voted to increase the rate as well as implement a single rate for lotteries. Buyers would now have to shell out 28 per cent GST on lotteries.

Before the GST Council meeting on Friday, the lottery industry pitched for a single rate of 12 per cent and removal of tax on the prize money. Currently only lotteries run by the state and state-owned agencies levy 12 per cent GST. Industry players that are authorised by the state government and who sell outside the organising state and are conducted by private players attract 28 per cent tax.

Since there were wide differences among finance ministers, the issue of tax on lotteries was prompted to a panel of ministers that was set up in last January. The eight-member group of ministers was constituted under the chairmanship of Maharashtra Finance Minister Sudhir Mungantiwar. The panel had recommended that the council would decide either on 18 per cent or 28 per cent GST for lotteries.

All lotteries are organised by states as per the provisions of Lottery Regulation Act 1998. Currently ten states in the country including Maharashtra, West Bengal, Punjab and Arunachal Pradesh allow lotteries.

Also read: GST Council meeting Live Updates: Lotteries get costlier, to be taxed at 28%