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Skill Lotto Solutions Pvt. Ltd. v. Union of India

Writ Petition (Civil) · 2020 INSC 676Decided 3 Dec 2020
Writ Petition (Civil) No. 961 of 2018
Justice Ashok Bhushan · Justice R. Subhash Reddy · Justice M.R. Shah

Background

Skill Lotto Solutions, an authorised distributor of lotteries organised by the State of Punjab, filed a writ petition directly in the Supreme Court challenging the definition of "goods" under Section 2(52) of the CGST Act, 2017 and the notifications that levy GST on lottery tickets. The company argued that taxing lotteries (treated as "actionable claims") was discriminatory and violated its constitutional rights to trade and against unfair taxation under Articles 14, 19(1)(g), 301 and 304. It also argued that including the prize money in the taxable value of a lottery ticket was improper.

Decision Breakdown

The Supreme Court dismissed the writ petition, upholding the levy of GST on lotteries. The Court held that lottery is an "actionable claim" and Parliament validly included actionable claims within the definition of "goods" for GST purposes: this did not amount to unconstitutional discrimination since lotteries, betting and gambling form a distinct class that can be treated differently from other goods. The Court also rejected the argument that prize money should be excluded while computing the taxable value of a lottery ticket, holding that the statutory scheme under Section 15 of the CGST Act does not permit such an exclusion. However, the Court granted the petitioner liberty to separately challenge, in appropriate proceedings, later notifications that equalised the GST rate on state-run and state-authorised lotteries at 28%, since those had not been challenged in this petition.

Lesson Learnt

Lottery tickets and similar actionable claims can be validly taxed as "goods" under GST law, and businesses dealing in regulated activities like lotteries cannot claim exemption from taxation merely by arguing discriminatory treatment compared to ordinary goods.

Official source (sci.gov.in)View Judgment (PDF)

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