SC upholds GST on lotteries, betting, gambling

The Supreme Court on Thursday upheld the provisions under the Central Goods and Services Tax Act, 2017 empowering the authorities to put a levy on lotteries, betting, and gambling.

“When 2017 Act defines the goods to include actionable claims and included only three categories of actionable claims, i.e, lottery, betting and gambling for purposes of levy of GST, it cannot be said that there was no rationale for including these three actionable claims for tax purposes," a bench of Justices Ashok Bhushan, R Subhash Reddy, and M R Shah said.

The bench noted that lottery, betting, and gambling are well-known concepts. Those have been in practice in this country since before independence and were regulated and taxed by different legislations.

“When the Parliament has included the three for purpose of imposing GST and not taxed other actionable claims, it cannot be said that there is no rationale or reason for taxing above three and leaving others," the bench added.

The court dismissed a plea by Skill Lotto Solutions Pvt Ltd, an authorised agent for the sale and distribution of lotteries organised by the Punjab government, against the imposition of the GST.

"The inclusion of actionable claim in definition ''goods'' as given in …CGST Act is not contrary to the legal meaning of goods and is neither illegal nor unconstitutional,” the bench held.

The company sought a declaration that the levy of tax on the lottery was discriminatory and violative of Articles 14, 19(1)(g), 301, and 304 of the Constitution.

The bench did not agree with the company's contention that the inclusion of “actionable claim” in the definition of goods in Section 2(52) of the CGST Act was contrary to the legal meaning of goods.