The Supreme Court on Thursday upheld the levy of Goods and Service Tax (GST) on sale of lotteries and gambling across the country.
A bench comprising justices Ashok Bhushan, R Subhash Reddy and MR Shah ruled that the Central Goods and Services Tax Act, 2017 and the notifications issued there under bringing lottery and gambling under the GST net are valid. The top court said that “while determining the taxable value of supply the prize money is not to be excluded for the purpose of levy of GST”
“The inclusion of actionable claim in definition “goods” as given in Section 2(52) of CGST Act, 2017 is not contrary to the legal meaning of goods and is neither illegal nor unconstitutional,” it held. According to judges, it is well settled that the courts have very limited role to play with regard to taxing policy of the legislature.
Challenging Section 2(52) of the 2017 Act and notifications levying tax on lottery, Skill Lotto Solutions, a dealer for sale and distribution of lotteries organised by Punjab, contended that the law was violative of the fundamental rights and contrary to the SC judgment (Sunrise Associates Vs government of NCT of Delhi) that held that lotteries were merely actionable claims and cannot be defined as ‘goods’.
It said that the GST Council wrongly viewed lotteries as “goods” while they were only “actionable claims”. Besides, lottery tickets by themselves were only “valueless pieces of paper” and cannot be taxed.
Skill Lotto also alleged that the notifications were arbitrary and discriminatory as the Centre had imposed GST of 12% on sale of lotteries within the same State and 28% if tickets were sold from other States.
While dismissing its petition, the Supreme Court granted the liberty to the petitioner to challenge the notifications of February 21 or March 2 by which rate of GST for lottery run by the state and lottery organised by the state have been made the same.
Source : Times of India