In re Ecool gaming solutions private limited (GST AAR Maharashtra)
In the present case, applicant is recipient of supply in the form of lottery and is located in Maharashtra. The supplier of lottery is the State Government of Mizoram which is located outside State .Therefore as per the provisions of Section 7(1) of the IGST Act, the transaction shall be treated as a supply of goods in the course of “interstate” trade or commerce.
In view of Section 5(3) of the IGST Act, we find that Notification No. 4/2017-Integrated Tax (Rate) dated 28.06.2017 has been issued which provides the description of goods in respect of which Integrated Tax shall be paid on Reverse Charge basis by the recipient of the Inter-State supply of such goods.
We find the ‘Lottery’ is covered under this Notification which is as under:-
| Sr. no | Tariff item ,sub heading or chapter | Description of Goods | Supplier of Goods | Recipient of Goods |
|
5 |
— | Supply of lottery. | State Government, Union Territory or any local authority | Lottery distributor or selling agent. Explanation. For the purposes of this entry, lottery distributor or selling agent has the same meaning as assigned to it in clause (c) of Rule 2 of the Lotteries (Regulation) Rules, 2010, made under the provisions of sub section 1 of Sec. 11 of the Lotteries (Regulations) Act, 1998 |
In the present case, we clearly find that the supplier of Lottery in the present case is the State Government of Mizoram and the recipient of supply i.e. Lottery distributor or Agent, is the applicant in the present case who is located in Maharashtra and therefore the applicant is liable to payment of IGST under Reverse Charge mechanism as per the provisions and Notification referred above.
In view of above deliberations applicant is liable to pay IGST under section 5 (3) of IGST Act, 2017 and Serial No.5 of Notification No. 4/2017 – Integrated Tax (Rate) is applicable on supply received by the applicant.
FULL TEXT OF ORDER OF AUTHORITY OF ADVANCE RULING, MAHARASHTRA
The present application has been filed under section 97 of the Central Goods and Services Tax Act, 2017 and the Maharashtra Goods and Services Tax Act, 2017 [hereinafter referred to as “the CGST Act and MGST Act”] by ECOOL GAMING SOLUTIONS PRIVATE LIMITED, the applicant, seeking an advance ruling in respect of the following ISSUE.
1. Whether application is liable to pay IGST under section 5 (3) of IGST act, 2017.
2. Whether Serial No. 5 of Notification No. 4/2017-Integrated Tax (Rate) is applicable on supply received by the applicant.
At the outset, we would like to make it clear that the provisions of both the CGST Act and the MGST Act are the same except for certain provisions. Therefore, unless a mention is specifically made to such dissimilar provisions, a reference to the CGST Act would also mean a reference to the same provision under the MGST Act. Further to the earlier, henceforth for the purposes of this Advance Ruling, a reference to such a similar provision under the CGST Act / MGST Act would be mentioned as being under the “GST Act”.
FACTS AND CONTENTION – AS PER THE APPLICANT
The submissions, as reproduced verbatim, could be seen thus-
Brief Facts,-
The applicant is acting as distributor or marketing agent of lottery schemes organised by the State Government of Mizoram (hereinafter referred as ‘organizing state’) and procure online tickets from organising state for distribution across Maharashtra. The lottery tickets are sold through a chain of dealers / sales terminals of applicant spread across Maharashtra.
Copies of the agreement made between organizing State and applicant is attached herewith and marked as Exhibit 1) The applicant is registered under GST primarily to pay GST under Reverse Charge Mechanism on supply of lottery tickets by the organising state.
There is no dispute that rate of GST prescribed on lottery tickets is 28% if lottery scheme is authorised by the State. There is no dispute that reverse charge mechanism is applicable on the supply of lottery tickets by the organizing state to distributors (like applicant).
Applicable Legal Provisions,-
Sec. 5 (3) of IGST Act, 2017 (similar provision in Sec. 9 of Central GST Act & Maharashtra GST Act also provides the following powers to appropriate government –
The Government may, on the recommendations of the Council, by notification, specify categories of supply of goods or services or both, the tax on which shall be paid on reverse charge basis by the recipient of such goods or services or both and all the provisions of this Act shall apply to such recipient as if he is the person liable for paying the tax in relation to the supply of such goods or services or both.
The aforesaid provision provides for powers to notify supplies under RCM and recipient became the person liable to pay GST in such cases. However, the determination of nature of supply and tax rate payable will be same as applicable to supplier.
Vide Serial No. 5 of Notification No. 4/2017 – IGST (Rate) (similar notifications issued in CGST SGST also], the following supplyof Goods has been notified under RCM –
