CBIC Clarifies GST Classification & Tax Rates on Lottery Tickets – Circular No. 6/6/2017-GST
<h3><strong>Key Highlights from CBIC Circular No. 6/6/2017-GST</strong></h3><p>On <strong>August 27, 2017</strong>, the <strong>Central Board of Excise and Customs (CBIC)</strong> issued <strong>Circular No. 6/6/2017-GST</strong> to address confusion regarding the <strong>classification and GST rate on lottery tickets</strong>. The circular provides clarity on how lotteries should be treated under GST law to ensure seamless tax compliance.</p><h3><strong>1. Lotteries Are Classified as Goods Under GST</strong></h3><ul><li>The <strong>CGST Act, 2017</strong> treats <strong>lottery tickets as goods</strong>, not services.</li><li>However, GST notifications had not assigned a specific <strong>HSN (Harmonized System of Nomenclature) code</strong>, leading to confusion in tax filings.</li></ul><h3><strong>2. Clarification on Classification – "Any Chapter"</strong></h3><ul><li>Since lotteries are goods, their classification in GST notifications is <strong>"Any Chapter"</strong> under the <strong>First Schedule of the Customs Tariff Act, 1975</strong>.</li><li>This means that lotteries do not have a fixed chapter heading and can be taxed accordingly.</li></ul><h3><strong>3. GST Rates for Lotteries</strong></h3><ul><li>The GST Council has prescribed <strong>two tax rates</strong> for lottery supplies:<ul><li><strong>12% GST</strong> – If the lottery is <strong>state-run and sold within the same state</strong>.</li><li><strong>28% GST</strong> – If the lottery is <strong>authorized by a state but sold in another state</strong>.</li></ul></li></ul><h3><strong>4. Impact on Businesses & Taxpayers</strong></h3><ul><li><strong>Smooth Filing & Compliance:</strong> Businesses selling lottery tickets can now classify them correctly while filing GST returns.</li><li><strong>No Disruption in Tax Payments:</strong> Clarifying the classification removes technical errors in tax deposits and ensures timely compliance.</li><li><strong>Uniform Taxation:</strong> Eliminates ambiguity, ensuring that all stakeholders apply the correct GST rate.</li><li><a href="https://cms.plasament.com/storage/chirag-singla/circularno-6-gst.pdf">circularno-6-gst</a><br> </li></ul>