Levy of gst on lottery is not discriminatory, while determining the taxable value of supply the prize money is not to be excluded for the purpose of levy of GST.
Section 2, 15 of the CGST Act, 2017 and Rule 31 of CGST Rules, 2017 — GST on Distribution of Lotteries – The petitioner, an authorized agent, for sale and distribution of lotteries organized by State of Punjab has filed petition impugning the definition of goods under Section 2(52) of Act, 2017 and consequential notifications to the extent it levies tax on lotteries. The petitioner sought declaration that the levy of tax on lottery is discriminatory and violative of Articles 14, 19(1)(g), 301 and 304 of the Constitution of India. The court regarding the petitioner’s submission based on circular dated 14.02.2007 observed that said circular was issued when the service tax was levied on distributor of paper lottery. The circular provided for determination of value of taxable service by deducting total cost of ticket paid by the distributor and price money paid by the distributor, that was regime when it was treated as business auxilliary service rendered by distributor. The said circular has no relevance or application after the 2017 enactment. Further, for determining the value of the lottery, there is statutory provision contained in Section 15 read with Rule 31A, which provides that sub-rule (2) as amended clearly provided that value of supply shall be deemed to be 100/128 of the face value of ticket or of the prize as notified in the official Gazette by the Organising State, whichever is higher.
Held that:- The Hon’ble Supreme Court held that the petitioner is not entitled to reliefs as claimed in the writ petition. Further held that the petitioner shall be at liberty to challenge the notifications dated 21.02.2020/02.03.2020 separately in appropriate proceedings.