LOTTERIES TO BE TAXED AT 28% UNIFORM RATE

The GST council on Wednesday resorted to voting to decide a rate. The issue of the gst rate for lotteries was decided on the basis of voting. The earlier decisions by the council through consensus. Currently there are two different rates for lotteries. 12% tax on state run lotteries and 28% tax for state authorised lotteries. Before 2017 there were no separate taxes for lotteries. The 17^th GST council meeting in June 2017, prior to the introduction of GST from July that year had specifically discussed the issue and decided to have the two different rates on state run and state authorised lotteries.

                          The difference in tax level has exploited the customers to a large extend. According to central government officials the 16% variation between the two rates helped the larger states to exploit the customers. After that several decisions were made to have an uniformal tax rates in all states. Officials also found that the differential  trade practices were misused. High differential rates also encouraged non compliance by small businesses. Many lotteries were run in the name of state, but were actually private lotteries.

    The state was not interested in either increasing the rate on state run lotteries or in lowering it on private lotteries. Why the maintained a different tax rates is because they feared that the uniform tax rate would affect thousands of lottery agents and sellers in the state , besides effecting the revenue of the state and the centre. But states like goa , Maharashtra , and assam were keen on a rate reduction on state authorised lotteries.