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New Delhi:
In a big verdict, the Supreme Court Thursday held that the levy of Goods and Services Tax (GST) on lotteries, betting and playing doesn’t quantity to hostile discrimination and isn’t violative of proper to equality beneath the Constitution.
Upholding the validity of the provisions beneath the Central Goods and Services Tax Act, 2017 empowering authorities to tax lotteries, a bench headed by Justice Ashok Bhushan dismissed a plea of Skill Lotto Solutions Pvt Ltd, a licensed agent on the market and distribution of lotteries organized by Punjab authorities.
The agency had sought setting apart the definition of products beneath Section 2(52) of the Central Goods and Services Tax Act, 2017 and consequential notifications to the extent it levies tax on lotteries and had sought a declaration that the taxing of lottery was “discriminatory and violative” proper to equality and follow occupation beneath the Constitution.
“We are of the view that definition of goods under Section 2(52) of the Act..does not violate any constitutional provision nor it is in conflict with the definition of goods given under Article 366(12). Article 366 clause(12) as observed contains an inclusive definition and the definition given in Section 2(52) of Act, 2017 is not in conflict with definition given in Article 366(12).
“…The Parliament was totally empowered to make legal guidelines with respect to items and providers tax. Article 246A begins with non obstante clause that’s ”Notwithstanding something contained in Articles 246 and 254, which confers very broad energy to make legal guidelines,” said the bench which also comprised Justices R Subhash Reddy and MR Shah.
It dealt with five aspects related to the challenge to the GST law and said the power to make laws as conferred under Article 246A, “totally empowers” Parliament to make laws with respect to goods and services tax and expansive definition of goods given in Section 2(52) cannot be said to be not in accord with the constitutional provisions.
Justice Bhushan, in the 87-page judgement, first dealt with the objection of the Centre that a company cannot claim the protection under the writ jurisdiction as its plea pertained to lottery.
“The writ petition alleging the violation of Article 14 particularly with respect to a parliamentary Act can very nicely be entertained beneath Article 32. We can also discover that with regard to the matter of lottery itself, this courtroom had entertained a writ petition earlier beneath Article 32,” the judgment held.
The top court, however, did not agree to the contention of the lottery firm that the inclusion of “actionable declare” in the definition of goods in Section 2(52) of CGST Act was contrary to the legal meaning of goods and hence unconstitutional.
It also did not agree to the contention of the firm that the top court’s observation in an earlier judgement that the lottery is an “actionable declare” and hence taxable was not the declaration of law.
“The inclusion of actionable declare in definition ”items” as given in CGST Act shouldn’t be opposite to the authorized which means of products and is neither unlawful nor unconstitutional,” the top court held.
“The Constitution Bench judgment of this courtroom in Sunrise Associates has laid down that lottery is an actionable declare as proposition of legislation. The remark can’t be stated to be obiter dicta,” it said.
It said that lottery, betting and gambling have been in practice since before independence and have been regulated and taxed under different legislations.
“When Act, 2017 defines the products to incorporate actionable claims and included solely three classes of actionable claims, i.e., lottery, betting and playing for functions of levy of GST, it can’t be stated that there was no rationale for together with these three actionable claims for tax functions,” it said.
Taxation in one or other form on the activities like lottery, betting and gambling has been in existence since last several decades, it said.
“When Parliament has included above three for function of imposing GST and never taxed different actionable claims, it can’t be stated that there isn’t any rationale or cause for taxing above three and leaving others,” it stated.
While dismissing the plea, the highest courtroom granted liberty to the agency to problem notifications of February 21 and March 2 by which the speed of GST for lottery run by the state and lottery organized by the state have been made the identical on the bottom that they weren’t assailed within the current plea.
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