The government has rationalised the service tax liability on sellers and distributors of lottery tickets by giving them the option to pay tax at flat rate based on the face value of tickets.

Under the new scheme, a distributor or lottery selling agent can opt to pay flat service tax of Rs 6,000 on every Rs 10 lakh of aggregate face value of lottery tickets printed by the organising state for a draw, the finance ministry said in a notification.

This amount will apply on those schemes where the guaranteed prize payout is more than 80 per cent.

In the Budget 2010-11, the government had introduced service tax on promoting, marketing, or organising of games of chance, including lottery, which is levied at 10 per cent.

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