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AIFLTAI issues public appeal to lower GST on lotteries even as central government rejects demand



The All India Federation of Lotteries Trade and Allied Industries (AIFLTAI) has issued a public appeal in the form of a prominent advertisement in the Economic Times today (see below) appealing to the Prime Minister, Union Finance Minister, state finance ministers and members of the GST Council to lower the discriminatory and arbitrary GST rate of 28% on the face value of lottery authorised by state governments but marketed by private distributors both within and outside the state.

The appeal claims that an artificial distinction has been made between lotteries run by the state government and lotteries authorised by the state government, with the former being subject to 12% tax on face value and the latter being subject to 28% GST on the face value of tickets.

The advertisement further states that imposition of GST on the face value of the tickets is conceptually flawed as most of the money collected through ticket sales is redistributed to the winners and only the margin or commission is retained by the private companies.  It also claims that in various International jurisdictions tax is only charged on the margin or commission.

AIFLTAI’s appeal also notes that lotteries provide employment to more than ten lakh people, whose livelihoods will be in jeopardy if the 28% GST on face value of lottery tickets is continued.

AIFLTAI has strategically issued a prominent advertisement today as the GST Council, a constitutional body of the Union Finance Minister and representatives of all state governments, that decides the tax rates is slated to meet tomorrow, i.e. on 18th January.

Interestingly, an article in The Indian Express states that the central government has rejected demands from private companies and  state governments like Arunachal Pradesh, Mizoram, Goa, Nagaland and Sikkim to lower the GST rate on lotteries.

Some states like Kerala and Punjab have however told the central government that it does not appear that GST has made any impact on the sale of lottery tickets.

Private lottery distributors have been protesting against the decision to impose 28% tax rate on the face value of lottery tickets for the past few months and have held large public meetings against the unified tax regime. Lottery agents and sellers claim that business has dropped by over 50-60% since the introduction of the new indirect tax regime.

Jay has researched extensively on gaming laws and has been cited by various media houses and journals as an expert. He has helped leading newspapers in their stories on gaming laws. Jay completed his B.A. LL.B. (Hons.) degree from NUJS, Kolkata in 2015 and is currently based out of Mumbai.