Lottery Tax Evasion

Lottery Tax Evasion October 6th 2018 15:09

The Central Goods and Services Tax Commissionerate (CGST) has accused four major lottery companies of avoiding paying the correct levels of tax required of them. Certain companies have also been accused of not making the necessary deposits to the Treasury even after collecting monies from customers, and also not filing the GST returns required by law. The CGST Department has said that they have been underpaid by Rs 13 crore as the case was opened by the Punjab Tax Department.

In short, lottery companies selling state lottery tickets within Punjab state must may GST at a rate of 12%. If tickets are sold outside of the state then proceeds from ticket sales must be taxed at 28%, which the CGST says has not happened with a handful of companies. The lottery companies strongly dispute these charges, however. The Head of Sales for Future Gaming and Hotel Services Private Limited (which is a company of Martin Group), Prem Raj Bamboli, said “GST of 28% is applicable if we sell lotteries of other state governments in Punjab or lotteries of Punjab government in other states. But since we sell Punjab’s lotteries in Punjab only, we are liable to pay only 12% GST on sales, and not 28%, as being claimed by the CGST Department.” Future Gaming on its own has been told that it needs to pay Rs 6.91 crore. Other companies standing accused are the Sugal & Damani Group and the Essel Group.

The lottery companies say that they have interpreted the tax laws correctly and that they are not breaking any laws, while an official at the CGST disagrees, and has said “As per law, 12% GST is applicable only if the state government sells lotteries directly without involving distributors. The rules are quite clear, and these tax rates have not been made overnight. They were made even before GST’s launch.” These new tax laws for lottery companies have been in place since June 2017 and caused an uproar among the affected companies at the time, who said it would force them out of business. The cases continue.

Nava Kerala Results Delay

The Nava Kerala lottery, in aid of flood releif in Kerala state, was to have been drawn on 3rd October, but the announcement of NK1 results has been delayed until October 15, when the draw will take place at 2pm Indian Time.

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