Lottery Ticket under GST wef 01-03-2020

CBIC recently issued a Notification No. 01/2020-Central Tax (Rate) dated 21.02.2020 (Effective from 01.03.2020).

• Single rate of GST @ 28% on both State run and State authorized lottery.
• Entry 242 in Schedule II of Notification No. 1/2017-Central Tax (Rate) dated 28.06.2017 omitted and
• Entry 228 in Schedule IV substituted to have single rate of 28% for all lottery (Any chapter)
• This change shall become effective from 1st March 2020

Lottery Tickets: –

“Lottery Tickets” is an actionable claim and is considered as” Goods” under GST.

Hence, Sale of lottery tickets would be considered as supply of taxable goods and GST will be applicable on sale of lottery tickets.

Lottery Run by State government: – A lottery can be sold within the organizing state and conducted by state-owned agencies.

Lottery authorized by the State government: – A lottery can be sold any state and is conducted by private players.

Rate of GST: –

The rate of GST @ 28% on both whether state run and state authorized lottery.

Value of Supply: –

In case of supply of lottery tickets the value of supply for charging of GST shall be higher of the following: –

• Face value of the lottery ticket
• Price notified by the organizing state

The value arrived above shall be inclusive of GST

Example: –

The Face value of the ticket is Rs. 115/- and price notified by the organizing state is Rs. 128/-.

The rate of GST @ 28%.

Value of Supply higher of the following: –

• Face value of the lottery ticket: – Rs. 115/-
• Price notified by the organizing state: – Rs. 128/-

Hence value of supply is Rs. 128/- for charging of GST and this amount shall be considered as inclusive of GST.

Taxable value:- (128*100)/(100+28)= Rs. 100/-

GST Payable:- Rs. 28/-

Place of Supply: –

Lottery run by State Government: – The place of supply will always be the intra-state because lottery tickets only sold within the state.

Lottery authorised by State Government: –

• 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.
• 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.

Time of supply: –

Earlier of the following dates:

• Date on which supplier receives the payment for supply.
• Date of issue of invoice or last date when the supplier is required to issue an invoice.

Payment of tax under GST: –

Lottery run by State Government: –

• Lottery tickets sold by State Government within the state.
• Lottery distributor is required to pay tax under reverse charge mechanism.
• Sub-agent / customer is not required to pay tax further when purchase from lottery distributor, if a tax is paid by a distributor.
• Sub-agents not required to register itself under GST

Lottery authorised by State Government: –

• RCM not applicable in this case.
• Supplier of lottery tickets is required to pay tax under forward charges
• The tax must be paid at each point of supply under normal charge. When selling agent sells tickets to sub-agent, he must pay GST.
• Sub-agents must register under GST and pay tax.