Incidence of service tax on sale of lottery tickets

[Ramachandran and Ramachandran Associates Subramanian]

Whether there is incidence of service tax on sale of lottery tickets by stockists ? These stockists buy lottery tickets from distributors and sell to retail selling agents. The purchases made from Distributors are invoiced. The sales effected to retail selling agents are invoiced. These stockists are merely traders. Whether any incidence of service tax will arise in this case ?

[Mukesh Kumar]

The decision of supreme court in case of Martin Lottery Agencies is a mix order [2009 -TMI - 33336 - SUPREME COURT OF INDIA]. On the one side it said that there is no service tax on lottory business, on the other side, it did not discuss the impact of changes made in the Business Auxilairy Service substantially with respect to lottery business. Therefore, the issue would decided finally by the SC, but as I believe that even if there is an amendment in the provisions, servcie tax is not payable.

AI Summary

Service tax on lottery sales: whether stockists' resale activity attracts tax given mixed precedent and amendment uncertainty. The issue concerns whether stockists who buy lottery tickets from distributors and resell them to retail agents, invoicing both purchases and sales as mere traders, attract service tax. The Supreme Court's Martin Lottery Agencies decision suggested lottery business does not attract service tax but did not consider subsequent amendments to Business Auxiliary Services; the commentator believes service tax is not payable despite those amendments.