India rules gambling and lottery winnings are taxable

by Mia Chapman Last Updated
India rules gambling and lottery winnings are taxable

The Indian Supreme Court has made a decision about whether or not gambling and lottery winnings are taxable.

Gambling News reports the Supreme Court of India ruled that lottery, gambling and betting should be taxed under the Goods and Services Tax Act.

The court decided that lottery, betting and gambling are defined as “actionable items” and present “goods” under Section 2(52) of the Central Goods and Services Tax Act, 2017.

In an 87-page judgment, the Supreme Court confirmed that imposing the GST on lotteries, betting and gambling by no means represents hostile discrimination and is not in contradiction with the right to equality under the constitution of India. 

The constitution bench in charge of the case consisted of judges Ashok Bhushan, Ramayyagari Subhash Reddy and Mukeshkumar Rashikbhai Shah.

Punjab lottery distributor Skill Lotto Solutions had filed a petition claiming that the application of the tax to lotteries and lottery winnings violated the constitution.

According to the petitioner, lottery tickets were not goods as defined by the Central Goods and Services Tax 2017 but “actionable claims”, which are subject to tax reliefs, except for specific gaming taxes.

The judgment elaborated on the definition of goods and actionable items and explained that the concepts of lottery, betting and gambling have been used in India since before the Independence and were subject to regulations by different legislations.

“When Act, 2017 defines the ‘goods’ to include actionable claims and included only three categories of actionable claims, such as lottery, betting and gambling, for purposes of levy of GST, it cannot be said that there was no rationale for the Parliament in including these three actionable claims for tax purposes, and leaving others,” Supreme Court of India judge Ashok Bushan said.

The court pronounced itself in line with the government’s stand that the Parliament has the authority to impose the GST tax on lotteries under Article 246A of the Constitution.

The verdict said that article is a special provision regarding goods and services tax and grants the Parliament with power to create laws in regards to the goods and services tax. 

India’s sports betting market is one of the most attractive in the world.

Online betting in India has undergone exponential growth over the last year, while mobile gambling is now the most popular form of online gambling in the country.

ACT gambling tax rakes in millions

One Australian territory government is raking in plenty of cash thanks to a new online betting tax.

The Canberra Times reported in August  that the ACT government is taking in more than five times the cash it expected from the new tax.

While it will lose significant revenue from poker machines, forced to close due to the COVID-19 pandemic, part of the losses will be offset by an increase in other gambling taxes.

When it introduced the tax, the government said it expected to make about $2 million a year from it.

However, in the month of May, the government said it had received $10.2 million in the 2018-19 financial year.

The full year’s takings are likely to be greater than that number, but the government was unable to provide the figure when asked.

While a proportion of pokies revenue in the ACT must go back into community organisations, the same arrangement does not exist for online gambling.

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