The GST department has detected a tax evasion to the tune of Rs. 344.57 crores in 12 cases involving lottery distributors from July 2017 to February 2023. This information was disclosed in Lok Sabha by Ministry of Finance as a written response to queries from two members in the on going Parliament session.

Responding to a query specific to states of Bihar, Jharkhand and Odisha, the ministry said it has not detected any tax evasion in these states due to sale of illegal paper lottery. It may be noted that lottery is legal only in handful of states in the country and often paper lottery is sold illegally in states where it is not permitted. Incidentally, all these states border West Bengal which generates huge revenues by sale of lotteries.

The Ministry of Finance today said it has in total recovered Rs 352.95 crores (including interest and penalty) from lottery distributors from inception of GST in 2017 till February 2023.

Since 1 March 2020, a single rate of 28 per cent GST is imposed on state-run and state authorised lotteries in the country. Earlier, lotteries were taxed under two slabs based on the category.

Impacted by the higher slab rate, the All India Federation of Lottery Trade and Allied Industries (AIFLTAI), an umbrella organisation of lottery distributors, stockists and agents in December 2021, had writen to the GST GoM requesting for a uniform GST rate for horse racing and online gaming.

The Ministry today further said that there is no proposal to set up a regulatory authority for lotteries in the country.

“Whenever any credible information/intelligence/complaints of violation of Direct Tax Laws (including TDS) relating to any taxpayer comes to its notice, the Income Tax Department takes appropriate action including issuing notices, conducting enquiries, mounting search & seizure or survey action, and assessment and consequential actions thereto, wherever applicable,” the Minister of State in Ministry of Finance Pankaj Chaudhary concluded the written response.