In a first, GST Council fixes 28% uniform tax rate for lottery
In a first, the Goods and Services Tax (GST) Council meeting resorted to voting to decide on an issue, as all the earlier decisions by GST Council had been taken through consensus. The controversial issue of GST rate for lotteries was decided on basis of voting, with the GST Council headed by Finance Minister Nirmala Sitharaman fixing a uniform tax rate of 28% on both state and private lotteries with effect from 1 March 2020. The voting move was taken on insistence of Kerala Finance Minister Thomas Isaac’s proposal.
GST Rate for Lottery
Currently, there are dual rates for lotteries, with 12% tax on state-run lotteries and 28% on state-authorised, or private, lotteries. Voting happened twice on the issue, with first time being on whether there should be a uniform or dual rate. 17 states voted in favour of single rate and 7 for a dual rate. Then there was voting on whether there should be an 18% or 28% rate for lotteries and all voted for 28%.
Besides lotteries, the GST Council decided to exempt upfront amount payable for long-term lease of industrial or financial infrastructure plots by an entity in which Centre/ State governments have at least 20% ownership. This exemption is currently available to those where governments have at least 50% stake. This move would promote setting up of industrial and financial parks.
The GST Council also decided to block input tax credit (ITC) for fake invoices in certain cases and further restrict credit for invoices not uploaded in relevant forms to 10% from current 20% of eligible credit. Also, to check the menace of fake invoices, suitable action will be taken for blocking fraudulently availed ITC in certain cases. The decision to block ITC in cases of fake invoices indicated that focus on revenue augmentation measures could lead to several anti-evasion measures in the coming months.
Category: Economy & Banking Current Affairs