Supreme Court upholds imposition of GST on lottery sales

The Supreme Court, on Thursday, upheld imposition of Goods and Service Tax (GST) on sale of lotteries..A three-judge Bench of Justices Ashok Bhushan, R Subhash Reddy and MR Shah ruled that the Central Goods and Services Tax Act, 2017 and the notifications issued under the same bringing lottery and gambling under GST net are valid..The petition filed by lottery dealer, Skill Lotto Solutions had contended that lottery cannot be classified as “goods” as has been done by the Central government.Instead they can be only considered as “actionable claims” and lottery tickets by itself are “pieces of paper devoid of any value”..The Centre had imposed GST of 12 percent on sale of lotteries within the same State and 28 percent if they were sold in other States..The three-judge bench held that definition of goods under Section 2(52) of the GST Act does not violate any constitutional provision nor is it in conflict with the definition of goods given under Article 366(12)."Article 366 clause(12) as observed contains an inclusive definition and the definition given in Section 2(52) of Act, 2017 is not in conflict with definition given in Article 366(12)," the Court said. .It was argued that assuming the lotteries to be actionable claims, the GST Act suffers from a hostile discrimination in including actionable claims within the category of goods and then excluding all actionable claims from supply of goods and creating a further exception of lottery, betting and gambling in Schedule III..The Court held that when prize paid by the distributor/agent is not contemplated to be excluded from the value of taxable supply, it cannot be said that prize money should be excluded for computing the taxable value of supply the prize money should be excluded. "We, thus, conclude that while determining the taxable value of supply the prize money is not to be excluded for the purpose of levy of GST," the top court ruled. .[Read judgment]