New Delhi: The Supreme Court has ruled that the Centre does not have the authority to levy lottery tax. The court made this clear while rejecting a plea seeking to bring the service tax of lottery distributors under the Central government. The court clarified that the power to levy lottery tax lies with the state governments and the Central government has no authority to interfere in it.
The court pointed out that the sale of lottery tickets is not a service. It is a way for the states to generate additional revenue. The central government moved to levy service tax on lottery by amending the Finance Act, 1994, in 2010. Considering a petition filed against this, the Sikkim High Court had ordered that the section of Section 65(105) of the Finance Act, 1994, which was inserted in the Finance Act, 2010, was unconstitutional. The Supreme Court’s observation was upheld by this order.
