The GST Council is considering uniform rate of 28 percent Goods and Services Tax or GST on all lottery as a part of the "one-nation, one-tax".
Controlled by a handful of operators, the lottery industry is pitching for a uniform 12 percent levy and removal of tax on prize money. At present, the GST on state lotteries is 12 percent, while those authorised by the state but run by private agencies are taxed at 28 percent.
The Central government is also looking at imposing a ban on the online lottery system. The Home Ministry will have a final say on the issue, The Times of India reported.
The GST Council is scheduled to meet on Friday in Goa. The council members are likely to have an intense debate on lottery rates that has divided states with some favouring the current mechanism of a lower rate for state-run lotteries, and a higher levy on the state-sponsored ones.
Ten states, including Goa, West Bengal, Punjab, Kerala, Maharashtra and Andhra Pradesh, allow lotteries.
The report added that a hike in the rate to 28 percent would be detrimental to the interest of states like West Bengal, but many other states are in favour of an increased tariff.
Many see lotteries as a sin good and think that it should be taxed as higher GST rate will discourage people from spending money on them.
The report said that the issue has been on the agenda of GST Council for several months, there are differences among the finance ministers of the states, which has prompted a reference to a panel of ministers, which was set up last January.
The GST council, headed by Finance Minister Nirmala Sitharaman, in July had deferred a decision and sought the country’s top legal officer, Attorney General KK Venugopal's view.
As the GST Council meets this Friday, the Centre is expected to push for one rate and Kerala will support the dual structure, a report in Business Standard said.
The council will take the views of both the Attorney General and the group of ministers, who have suggested a single rate, the report said.
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