E-way Bill Services, GST on Lottery Industry

The government recently shot down requests to lower the GST on Lottery businesses. Today, we will discuss about how the lottery business suffers due to GST implemenation.

In this day and age, if one was to say that he/she isn’t familiar with Kaun banega Crorepati (KBC), he/she would be on the receiving end of death stares. But for those who live under a rock, I shall fill you in. KBC is the Indian version of the United Kingdom game show ‘Who Wants to Be a Millionare?’ Our game show is currently in its 9th season and Amitabh Bacchhan is the host.

It is one of the sensible things on Indian television right now, really (most other T.V series are appalling). Mr. Bacchhan can engage not only the contestant on the hot seat but also the people glued to their T.V screens. And you get to learn! It’s genius, if you ask me. The only dampener is the tax the contestants have to pay on winning.

Direct and Indirect Tax

Types of taxes, Direct and Indirect Taxes, GST on Lottery Industry

 

When someone wins on an Online/T.V game show, the winner shall pay Direct Tax at the flat rate of 30% on the income so generated. After adding cess, the tax rate will amount to 30.9%. No Indirect tax is charged on winnings from a game show, whether played online or on T.V.

GST on Lottery Businesses

GST Rates for Lottery Industry, GST Impact on Lottery Industry

Online skill games fall within the category of ‘all other services not specified elsewhere’.

Impact of GST on Lottery Businesses

(Jaldi kijiye deviyo aur sajjano, keval 1 minute reh gaya hain)

The 28% GST on face value of lottery has adversely impacted the online lottery business. GST on Lottery is significantly higher than the minimal or zero tax levied by the states that have lotteries. The tax on online skills game was 15% earlier. With the Input Credit Mechanism now available, the 18% GST isn’t an extreme hike.

GST Accounting, GST on Lottery Industry

Lottery is a well-regulated industry. It provides direct employment to over 10 lakh people. Higher tax slabs would force lottery companies out of business. It will also spawn a large number of underground, illegal lottery schemes. The online lottery business generates employment for a large number of people in the state. It provides  livelihood to economically weaker sections like widows, differently abled, handicapped and uneducated people. At a protest held against the 28% tax, the protesters demanded that GST on Lottery should be levied only on margin money i.e. the price of the lottery ticket minus payouts.

In the Council meetings held since the protest, there has been no discussion regarding reduction of GST on Lottery and other gaming activities.