Applicability of GST on Lotteries‘Lottery tickets’, is actionable claim and is classified as ‘Goods’, under GST. However, an actionable claim is specifically covered under the negative list-schedule III of the CGST Act, keeping it outside the scope of GST. But there are exceptions to schedule III. Sale of Lottery tickets is one of them Hence, the sale of lottery tickets would be considered to be the supply of taxable goods and will attract GST on Lottery sales.
Rate of GST on the sale of Lottery TicketsGST rate on the supply of lottery tickets are as follows-
|Nature of lottery gaming||GST rate|
|Run by State Government – It is conducted within the State and conducted by state-owned agencies||12%*|
|Authorised by State Government – It can be sold outside the organising state and is conducted by private players||28%*|
How to calculate the Value of SupplyIn case of supply of lottery tickets, the value for charging GST shall be higher of the following:
- The Face value of ticket
- Price notified by the organising state.
HSN Classification of Lottery TicketsThe CBIC has clarified that HSN classification of the lottery shall be “Any Chapter” and tax would be paid at applicable rates (12% or 28%).
Payment of tax under Reverse ChargeIn the case of lottery run by State Government, the tickets are sold by the State Government to lottery distributor /selling agent. The selling agent is required to pay tax under reverse charge. Subsequently, when the selling agent supplies such tickets to sub-agent, no tax is required to be paid. The local sub-agent is also not required to pay any tax. Thus, a tax is levied at single – point under reverse charge in case of lottery run by State Government. However, in the case of lottery authorised by State Government, the tax is to be paid under the forward charge by the lottery selling agent (i.e.supplier). A tax must also be paid at each stage of supply.
|Lottery run by State Government||
|Lottery authorised by State Government||
Invoicing requirementsSupply of lottery tickets must be under the cover of tax invoice containing all particulars required in an invoice. The invoice is required to be issued with the sale of a lottery ticket. There is no relaxation in invoicing requirements for a supplier of lottery tickets.
Time of supply to know GST on LotteryThe time of supply of lottery tickets shall be earlier of the following dates:
- Date of issue of invoice or last date when the supplier is required to issue an invoice.
- Date on which supplier receives the payment for supply.
Place of supply to know GST on Lottery
- 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.
- Lottery authorised by the State Government but conducted by agencies can be an inter-state or intra-state supply. The place of supply will have to be determined as under:
- 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.
- 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.