No rate hike, GST Council votes for uniform lottery rate

New Delhi: The all-powerful GST Council, in its 38th meeting here on Wednesday, voted for uniform rate of 28 percent on lotteries across the country. During the voting, 21 states voted in favor of a uniform rate.

This is the first time since the launch of the new indirect tax that the Council has taken a decision through the voting route. Earlier, all decisions including the contentious ones were taken unanimously. As per a Minister from Goa present during the discussion and voting, the uniform GST rate on lotteries would apply from March 2020. Under the GST Act, there are two rates prescribed on the sale of lottery tickets. One is 12 percent if the tickets are sold within the same state, and the other is 28 percent if a state sells the lottery tickets in other states.

The GST Council did not discuss rate hike proposals during the meeting.

Meanwhile, many states are learned to have taken up the issue of delay in compensation. West Bengal Finance Minister Amit Mitra said that considering the revenue projections given by the Centre, there may not be enough money for compensating the states. “Basically, the shortfall they are looking at by February next year, it appears from their projection that there will be no appropriate money for compensation,” he said.

Mitra said that there was a need to plug the leakages, stop frauds and strengthen the system to augment revenue. He expressed concern over the delay in making the system robust, noting that invoices are still not uplinked on the GST network even today. “We need to tighten many many things,” he added. With revenue shortfall emerging as a major area of concern, the Centre has set a Rs 1.10 lakh crore monthly GST collection target in the remaining months of the fiscal with Rs 1.25 lakh crore target set for one of these months.

In the past eight months of the current fiscal, only in the month of April — which is considered peak collection month —, the mop-up was a tad above Rs 1.10 lakh crore. In four months, the collection was below the Rs 1 lakh crore mark. Tax experts hope the monthly collections reach the new target provided economic growth improves.

M.S. Mani, Partner at global consultancy Deloitte, said that the target was quite achievable if the economy grows at 6-7 percent.

The decline in growth rate has impacted the collection of both GST, as well as compensation cess, levied to make up for revenue loss to states on account of a shift to the new regime. As a result of drop-in the collection, the Centre has been finding it difficult to release compensation on time. While it has paid the compensation for the months of August and September to the states after much delay, the release of funds for October and November remains due. (IANS)

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