Explanation of Notification No. 01/2020 Dt. 21.02.2020 of Central Tax (Rate). Such Notification is Deal with GST Rate on Supply of Lottery.

Lottery Tickets:-

‘Lottery Tickets ‘ is an actionable ticket and is graded under GST as ‘ Goods. ‘

According to Schedule III, however, Actionable Payment does not include any delivery of goods or services, but the exception is Lottery Tickets.

The selling of lottery tickets would, therefore, be deemed to be an offer of taxable goods and add GST to the sales of the lottery.

What is Actionable Claim:-

In compliance with Section 3 of the Property Transfer Act, 1882. Actionable Claim is a claim for any debt other than mortgage or hypothecation or promise of movable property, or any beneficial interest in transactions that are not currently or constructively in the hands of the claimant which is recognized by the civil courts as providing reasons for relief whether such debt or beneficial interest exist, is accruing or co-existent.

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GST rate on Supply of Lottery as Under, Before.

1) If Lottery Run by State Government:- GST Rate is 12%.

2) If Lottery authorized by State Governments:- 28%.

Understand the Meaning of Lottery Run by State Government & Lottery authorized by State Governments.

1) ‘Lottery run by State Governments’ means a lottery not allowed to be sold in any state other than the organizing state. 2) ‘Lottery authorized by State Governments’ means a lottery which is authorized to be sold in State(s) other than the organizing state also.

After such Notification there is no difference between whether ‘Lottery run by State Governments’ and ‘Lottery authorized by State Governments’.

The uniform rate is notified by Government i.e. 28%.

The value of lottery distribution pursuant to subparagraph (5) of Section 15 of the Central Goods and Services Tax Act of 2017 shall be considered as 100/128 of the ticket’s face value or price as notified by the organizing State in the Official Gazette, whichever is higher.

The supply of lottery tickets is covered by the Tax Invoice in accordance with Section 31 of the CGST Act of 2017 and includes all the provisions referred to in Rule 46. Invoicing standards for a lottery ticket manufacturer are not relaxed.

Time of Supply of Lottery Tickets:-

1) Date of issue of invoice or last date when the supplier is required to issue an invoice.

2) Date on which supplier receives the payment for supply.

If someone pays the sum for a draw or buys a lottery ticket, the money paid is regarded as a supply payment.

Place of Supply of Lottery Tickets:-

1) “Lottery run by State Government” is always an intra-state supply. The place of supply will always be the State which runs the lottery game. This is because such a lottery scheme is always conducted within the State.

2) “Lottery authorized by the State Government” but conducted by agencies can be interstate or intra-state supply.

The place of supply will have to be determined as under:

i) When supply involves the movement of goods: The place of supply shall be the location of goods at the time at which movement of goods terminates for delivery to the recipient.

ii) When supply does not involve the movement of goods: The place of supply shall be the location of goods at the time of delivery to the recipient.I) Payment of Tax:- 1) “Lottery run by State Government” i) Tickets sold by State Government ii) Lottery distributor must pay tax on reverse charge (Sec 9(3)) at the time of procurement of tickets from the Government.

iii) No tax required to be paid further when sold to sub-agent / customer, if a tax is paid by a distributor. iv) Sub-agents not required to register under GST 2) “Lottery authorized by State Government” i) Tax paid under the forward charge by the supplier of lottery tickets ii) The tax must be paid at each point of supply under normal charge. When selling agent sells tickets to sub-agent, he must pay GST. iii) Sub-agents must register under GST and pay tax.

Thank You.

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