The lottery industry, which is controlled by a handful of operators, is pitching for a uniform 12% levy and removal of tax on prize money. Currently, lotteries run by state government, which if conducted within
the state and by state-owned agencies, face 12% GST.
But those which are authorised by the state government, sold outside the organising state and conducted by private players, attract 28% tax. Currently, around 10 states, including Maharashtra, West Bengal, Punjab and Arunachal Pradesh, allow lotteries.
Sources said the recommendation is to move to a single rate of 28% as an 18% levy would be detrimental to the interest of states such as West Bengal, although several other states are in favour of it. Besides, many see lotteries as part of sin goods, which need to be taxed at a high rate so that people are discouraged to spend on it.
While the issue has been on the GST Council’s agenda for several months, there are wide differences among state finance ministers, which had prompted a reference to a panel of ministers, which was set up last January. In July, the council headed by finance minister Nirmala Sitharaman had deferred a decision and sought the attorney general’s views. This Friday’s meeting is expected to see intense discussion on the subject given differing views of the states.
Sources said the Centre is separately discussing the possibility of imposing a ban on online lottery, an issue on which the home ministry will have the final say.