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Rules on Lottery Taxation Authority
February 17 , 2025
3 days
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- The Supreme Court ruled that only state governments - not the Centre - have the authority to impose taxes on the sale of lotteries.
- Lotteries fall under the definition of “betting and gambling” as per Entry 62 of the State List in the Seventh Schedule of the Constitution.
- This was making it clear that only state legislatures have the power to tax them.
- The operation of lotteries is not uniform across the country - only some states allow and regulate lotteries, while others have outright banned them.
- The central government made Amendments to the Finance Act in 2010, 2012, 2015 and 2016 sought to levy service tax on lottery-related activities
- The Centre was arguing that the distribution, promotion, marketing, and sale of lotteries amounted to a taxable “service”.
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