TaxTMI 
TaxTMI 
A private lottery distributor selling lottery tickets to customers. He is purchasing gifts that are to be distributed to the lottery winners after the result.
Whether the lottery distributor is eligible to claim the GST credit on gifts given to lottery winners as per the GST law?
Input tax credit on Lottery Gifts
20 Jul 2023 
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Input Tax Credit on prizes is blocked unless the prize cost is included in the taxable supply and GST is paid.
Eligibility for Input Tax Credit on goods distributed as lottery prizes depends on whether those goods are gratuitous or form part of a taxed outward supply: gifts, prizes and free samples are ordinarily blocked from ITC, but if the cost of the prize is included in the ticket's taxable value and GST is paid, ITC may be available; factual determination and supporting evidence are decisive. (AI Summary)
Eligibility for Input Tax Credit on goods distributed as lottery prizes depends on whether those goods are gratuitous or form part of a taxed outward supply: gifts, prizes and free samples are ordinarily blocked from ITC, but if the cost of the prize is included in the ticket's taxable value and GST is paid, ITC may be available; factual determination and supporting evidence are decisive. (AI Summary)