GST Council votes for the first time to levy 28% tax on all lotteries

FM Nirmala Sitharaman chaired the GST Council meeting attended by state finance ministers.
State finance ministers at GST Council meet on Wednesday in New Delhi.

The GST Council meeting on Wednesday voted for the first time to levy a single GST rate of 28% on both state-run and state-authorised lotteries from the next financial year. The issues was decided by a 21-7 vote in the council after Kerala opposed the plan to have single rate. Currently. state-run lotteries are taxed at 12% while private or state-authorised ones attract a tax rate of 28%. Kerala finance minister Thomas Isaac pushed for the continuation of dual rates. He was supported by the finance ministers of Maharashtra, Chhattisgarh, Puducherry, Madhya Pradesh, Delhi and West Bengal. The debate on lottery consumed most of the scheduled time, leaving little time to discuss other items on the meeting’s agenda.

Later talking to newspersons, Isaac said the Kerala government will not allow lotteries run by criminals who are barred by the Supreme Court. He said a decision on the pricing and other aspects will be taken by the state government soon.

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The council also recommended the setting up of grievance redressal committees at zonal and state levels with GST officers from the Centre and states, GSTN, GST practitioners, and the representatives of trade and industry. The meeting chaired by Union finance minister Nirmala Sitharaman was attended by minister of state for finance, state finance ministers and senior officers of the finance ministry.

It also decided to exempt upfront payment for long-term lease of industrial/ financial infrastructure plots by entities in which central or state governments have 20% or more stake. The new rule will come into effect on January 1, 2020. At present, the exemption is given to companies with more than 50% government ownership. The council extended the deadline for filing annual return in form GSTR-9 and reconciliation statement in form GSTR-9C for 2017-18 to January 31. The finance ministry officials made a presentation to the council on revenue collection, GST rate structure and compensation to the states. The presentation gave detailed revenue trends since the rollout of GST. The meeting discussed issues such as measures for encouraging compliance, expanding tax base, steps to improve return filing, tax mop-up, and rate rationalisation.

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The GST collection saw an uptick in November to Rs 1.03 lakh crore, making it the eighth month since the roll out of the indirect tax regime to cross the Rs 1 lakh crore mark. The month witnessed the third highest monthly mop-up since inception of GST.

The revenue department has asked taxmen to meet GST mop-up target in the rest of the fiscal. The department has set a new monthly target for the December-March period at Rs 1.15 lakh crore. The average monthly GST collection in the first eight months of the fiscal is Rs 1 lakh crore.