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SKILL LOTTO SOLUTION PVT. LTD. V. UNION OF INDIA

Skill Lotto Solution Pvt. Ltd. v. Union of India, 3 December, 2020

ISSUE:

  • Whether the Writ Petition is maintainable under Article 32 or not
  • Whether the inclusion of lottery as actionable goods in the ambit of goods as per the Goods and Services Tax Act is constitutional or not?
  • Whether it should be taxed for the same reason or not?

RULE:

  • The levy of GST on lottery, betting, and gambling is constitutional. It has been held that these activities are “res extra commercium”, which means that they are outside the sphere of commerce. This means that the government is free to regulate and tax them in any way it sees fit.

FACTS:

  • Skill Lotto Solution Pvt. Ltd. is an authorized agent of the State of Punjab for the sale of lottery tickets.
  • The company challenged the levy of GST on lottery, betting, and gambling under the GST Act, 2017.
  • The company argued that the levy of GST on these activities was unconstitutional and discriminatory.
  • The case went to the Supreme Court, which had to decide whether the levy of GST on lottery, betting, and gambling was constitutional and discriminatory.

HELD:

  • The Supreme Court of India held that levy of GST on lottery, betting, and gambling is constitutional.
  • Lottery, betting, and gambling are “res extra commercium”, which means that they are outside the sphere of commerce which means that the government is free to regulate and tax them in any way it sees fit.
  • The Hon’ble Court held that levy of GST on lottery, betting, and gambling is not discriminatory.
  • These activities are already subject to other forms of taxation, such as income tax and entertainment tax.
  • The GST law also provides for a number of exemptions and concessions, which benefit certain categories of people and businesses which means that the government is free to tax lottery, betting, and gambling in any way it sees fit.