The Goods and Services Tax Council on Wednesday approved a uniform rate of 28% on lotteries across India, ANI reported. The 38th meeting of the council, which has representatives from every state and the Centre, was held in New Delhi.
Revenue Secretary AB Pandey said the GST rate for both state-run and private lotteries would be effective from March 1, 2020. This is the first time the council took a decision through a vote, Mint reported. Twenty-one states voted in favour of the uniform rate.
Finance Minister Nirmala Sitharaman said every attempt was made to keep alive the tradition of not voting. “But eventually council was reminded that tradition was not part of rulebook,” she said. “It was not imposed by council or me but on a request from a member.”
The meeting was the first since several states publicly complained about the Centre reneging on its commitment to provide a compensation for the revenue that they forego due to moving to the GST system. The GST Act promises states enough compensation from the Centre to keep their annual revenue growth at 14% for five years, no matter what the actual collections under the system are.
Sitharaman said the states had recognised that Centre had released Rs 35,298 crore as GST compensation on Monday. Seven Opposition-ruled states and Union Territories had met Sitharaman earlier this month, demanding that the compensation amounts be released immediately. Kerala had even threatened to take the matter to the Supreme Court.
The complaints prompted the GST Council to write a letter to the states on December 4, expressing concern about the Centre’s ability to pay the compensation, and asking for suggestions about dealing with the situation.
The concerns around GST compensation come at a time of a major economic slowdown coupled with a severe shortfall in tax collections by the Centre.