In a first, GST Council votes; 28% tax on lotteries

Facing acute shortage of revenue, the GST Council on Wednesday decided to impose a uniform 28% levy on lotteries, but deviating from precedence, the decision was taken by voting. Seven states expressed divergent opinions.

Until now, decisions that the council took in the past two years, were all unanimous.

"Every attempt was made to keep tradition alive but eventually the council was reminded that tradition was not part of rulebook. It was not imposed by the council or me but on a request from a member," Finance Minister Nirmala Sitharaman said.

Currently, dual rates are imposed on lotteries. A 12% GST is imposed on state lotteries which are sold in states and 28% on those sold outside the state. The new rates will be effective from March 1.

Any GST rate hike on other goods and services were not discussed in the meeting even as the revenue collection from GST has dipped in the past three to four months.

On the issue of compensation to states, Sitharaman said that the federal bodies took into account the compensation amount of Rs 32,000 crore given to them a couple of days ago, but Kerala Finance Minister Isaac Thomas said the Union finance minister was not willing to give assurance on the December payment of compensation to states though there was money in the Centre's kitty.

Punjab was of the view that the Centre could disburse compensation even if the revenue position was not all that good. The state said the Centre owed it Rs 3,100 crore towards compensation and the next tranche of Rs 2,000 was due in December.

Revenue Secretary Ajay Bhushan Pandey said the GST Council agreed to rationalise GST rate on woven and non-woven bags to 18% with effect from March 1.

The GST council also decided to waive late fees for all taxpayers, who filed monthy GST return, if all refunds were filed by January 10, 2020. The council also extended the deadline for filing annual GST returns for FY18 to January31, 2020.