Lottery, playing, betting taxable under GST Act: SC
[ad_1]
The Supreme Court on Thursday held that lottery, playing and betting are taxable under the Goods and Services Tax (GST) Act.
The court docket held that lottery, betting and playing are “actionable claims” and are available inside the definition of ‘goods’ under Section 2(52) of the Central Goods and Services Tax Act, 2017.
A 3-judge Bench led by Justice Ashok Bhushan mentioned the levy of GST on lotteries doesn’t quantity to “hostile discrimination”.
“Lottery, betting and gambling are well known concepts and have been in practice in this country since before Independence and were regulated and taxed by different legislations. When Act, 2017 defines the ‘goods’ to include actionable claims and included only three categories of actionable claims, i.e., lottery, betting and gambling, for purposes of levy of GST, it cannot be said that there was no rationale for the Parliament in including these three actionable claims for tax purposes, and leaving others,” Justice Bhushan wrote within the 87-page judgment.
The court docket mentioned State regulation, together with taxation in a single or different kind, on lottery, betting and playing, has been in existence for many years.
Justice Bhushan was responding to arguments made by Skill Lotto Solutions and different lottery brokers that lottery just isn’t ‘goods’ and GST on it was unlawful. They mentioned taxing solely lottery, playing and betting and never different actions confirmed a “clear hostile discrimination”.
But the court docket mentioned the Parliament had an absolute energy to go for an “inclusive definition” of the time period ‘goods’ to incorporate actionable claims like lottery, playing and betting.
“The power to make laws as conferred by Article 246A fully empowers the Parliament to make laws with respect to goods and services tax and expansive definition of goods given in Section 2(52) cannot be said to be not in accord with the constitutional provisions,” Justice Bhushan wrote.
The court docket accepted the federal government’s stand that the Parliament has the competence to levy GST on lotteries under Article 246A of the Constitution.
“Article 246A is a special provision with regard to goods and services tax w.e.f. 16.09.2016, which special power has to be liberally construed empowering the Parliament to make laws with respect to goods and services tax,” it mentioned.
Besides, the court docket mentioned Section 2(52) of the GST Act was according to the Constitution Bench judgment of the Supreme Court within the Sunrise Associates case, which had held that “the sale of a lottery ticket amounts to the transfer of an actionable claim”.
The court docket additionally rejected a suggestion to exclude the prize cash from GST whereas figuring out the face worth of the lottery tickets.
“The value of taxable supply is a matter of statutory regulation… it is not permissible to compute the value of taxable supply by excluding prize which has been contemplated in the statutory scheme,” the court docket held.
[ad_2]
