Skip to main content

Tax on Lottery in India

 TAX ON LOTTERY INDIA 



INTRODUCTION


In an exemplifying case , the Supreme Court in a judgement held that a state legislature has the right to impose tax on lotteries conducted by other States within its jurisdiction.

Earlier  before this significant judgement  , the Karnataka High Court delivered a judgement striking down major portions of the Karnataka Police (Amendment) Act, 2021 which banned online gambling and skill-based gaming platforms.

In 2020, the Supreme Court held that lottery, gambling and betting are taxable under the Goods and Services Tax (GST) Act, 2017.

Separate appeals were brought by the governments of Karnataka and Kerala, which had adopted separate rules for taxation lotteries run by other states and private organisations. The verdict came in response to petitions filed by the governments of Karnataka and Kerala against High Court decisions to nullify statutes adopted by their legislatures to tax lotteries organised and promoted by the states of Nagaland, Arunachal Pradesh, Sikkim, and Manipur in Kerala and Karnataka.


The tax legislation imposed by the two states, however, were deemed unlawful and unconstitutional by the High Courts, who even ordered Kerala and Karnataka to restore the money collected as tax from lotteries to the north-eastern states.


HIGH COURT  RULING OF KARNATKA AND KERELA HIGH COURT 

The Karnataka Tax on Lotteries Act of 2004 and the Kerala Tax on Paper Lotteries Act of 2005 were both challenged for their legality. The Karnataka High Court, in separate rulings issued in December 2010 and March 2011, found that the Karnataka legislature lacked legislative competence to approve the aforementioned law and ordered the states that organised the lottery schemes to reimburse the money they had put up. Nagaland, Arunachal Pradesh, Meghalaya, and Sikkim were among these states.


Similarly, the Kerala high court declared the 2005 Act, 2005 to be illegal and unlawful in separate rulings issued in April 2020 and August 2021.



SUPREME COURT RULING 

 The Supreme Court, on the other hand, stated that "lotteries" are a "kind of gambling activity." The State List in the Constitution's Seventh Schedule includes 'betting and gaming.' All activities that are in the nature of 'betting and gambling,' including lotteries, are subject to taxation. The court stated that there is no dispute that lotteries are 'betting and gambling,' regardless of whether they are conducted or organised by the Government of India or the Government of a State, or whether they are authorised by the State or conducted by an agency or instrumentality of the State government or the Central government or any private player. The Court further noted that there is no particular entry in List I (Union List) for the imposition of a tax on betting and gaming, as it is only provided in the State List. "As a result, Entry 62 of List II grants a state assembly legislative authority to charge a tax on betting and gambling." At the same time, the court stressed that Entry 40 of List I is solely intended to regulate lotteries and that it cannot be broadened to include the competence of the Parliament to charge taxes on lotteries.





Comments

Popular posts from this blog

Concept of constitutionalism

  Concept of constitutionalism Who Started Constitutionalism? John Locke - The English Bill of Rights is a foundational constitutional document that helped inspire the American Bill of Rights. Political theorist  John Locke  played a huge role in cementing the philosophy of constitutionalism.  Constitution is a written law which describes the structure of Government, the rules according to which the Govt. must work and the boundaries within which the Govt. must work. Constitutionalism   can be defined as the doctrine that governs the legitimacy of government action, and it implies something far more important than the idea of legality that requires official conduct to be in accordance with pre-fixed legal rules. Constitution constitution is the document that contains the basic and fundamental law of the nation, setting out the organization of the government and the principles of the society. Basic norm (or law) of the state; System of integration and organi...

business tips

1. Have a clear vision for your business and strive to achieve it. 2. Hire great people and give them ownership in the company. 3. Provide excellent customer service. 4. Establish yourself as an expert in your field. 5. Develop relationships with key suppliers, customers, and partners. 6. Keep track of your finances and invest in marketing and innovation. 7. Utilize digital platforms to reach a larger audience. 8. Take calculated risks and back yourself. 9. Continuously strive to improve your products and services. 10. Make customer satisfaction your priority.

Effects of Non-Registration

 Effects of Non-Registration The Companies Act, 2013 evidently highlights that the main essential for any organization to turn into a company is to get itself registered. A company cannot come into existence until it gets registered. But no such obligation has been imposed for firms by the Indian Partnership Act, 1932. If a firm is not registered it does not cease to be called as a firm, it still exists in the eyes law. Certainly, such a big advantage is not absolute but is subjected to a lot of limitations which we will study further. Non-registration of a firm simply means that the business skips the formalities of incorporation and ceases to exist in the eyes of the law. section 58 of the Indian Partnership Act, 1932 deals with the procedure of incorporation. Likewise, the meaning of non-registration is the exact opposite of registration, meaning when a firm does not go through the procedure of incorporation or start carrying on activities without getting registered. Effects of ...