Can GST push legal online ticketing business to embrace illegal path?
Across India, lottery tickets business employs around 810 lakh people directly and indirectly and now, it is living in fear on what is next with implementation of GST.
In order to deal with the situation, All India Federation of Lottery Trade & Allied Industries issued an appeal. It stated that to sustain online lottery business, the Government should take separate decision and levy GST on the margin of online lottery tickets sale, as prize winning is already taxed under the Income Tax Act 1961.
The GST Council has decided to levy GST on supply of lottery tickets on the face value, which would be 12 per cent in Maharashtra and other states 28 per cent. Maharashtra employs more than 5 lakh people directly or indirectly by investing a nominal amount of Rs 30,000 deposit. One wellwishers of the business said, “Such tax regime will push a legal online lottery business to move into illegal system.”
In Maharashtra, online lottery schemes are offering prize payout of 90 per cent to 92 per cent.
There were various representations that were made by the business to the government but the association has not received a positive response. Online lottery business is run mostly by economically weaker, differently abled, widow and uneducated people. J P Sharma, a trustee of charitable trust said, “I am a well-wisher of this business. One has to see the social element here. This business has been able to support a lot of social causes.”
The federation in the note stated that if the Government imposes GST on face value of online lottery, it will amount to closure of the trade as it would be very difficult for the lottery operators and distributors to survive.
It further added if the Government considers its decision to levy GST on supply of online lottery tickets on the margin money, the government of Maharashtra will be able to get substantial revenue from tax i.e. minimum 350–400 crore rupees per annum. Apart from Maharashtra, other states like Kerala and West Bengal see a huge demand for online lottery.