Friday council meeting to be naughty in regards to GST rates on lotteries

New delhi date. 18 September 2019, Wednesday

The Goods and Services Tax (GST) council meeting on Friday is likely to create a lot of heat on the lotteries. The central government wants to keep the same rate of GST on lotteries while Kerala is insisting on continuing the existing two rate structure.

The issue was earlier referred to Attorney General KK Venugopal, who voted that the constitutional autonomy of trading on lotteries was not violated at any rate. The GST Council can decide on this issue.

The council is likely to discuss the rate on lotteries at Friday's meeting. At present, the rate of GST on lotteries of the state government is 5% but the rate of GST on lotteries run by private agencies with the approval of the state government is 5%.

The council has noticed that this double rate is being misused by some private lottery operators, sources said.

If each lottery is covered under a 5% rate, the government treasury is likely to generate additional revenue of Rs 5 crore.

Most of the decisions have been taken unanimously in the council so far, but Kerala's finance minister had asked for a vote in the last meeting on lottery issues.

The Kerala government does not want to make any change in the rate of lotteries. If this is done, the Kerala government believes that thousands of lotteries agents and sellers will be affected and the revenue of the states and the center will also be affected.

Meanwhile, Friday's meeting seems unlikely to satisfy auto sector and biscuits companies' demand for lowering GST rates. The recent slowdown in crude oil prices could put pressure on the government's fiscal deficit as the Center's GST revenues have slowed as a result of the economic downturn. In view of this fact, the central government will endeavor to increase the revenue through GST, the sources said.