Supreme Court Upholds: No Service Tax on Lottery Promotions

The Supreme Court dismissed the Centre's appeals, ruling that service tax cannot be levied on the promotion, marketing, or sale of lottery tickets. The verdict enforces a Sikkim High Court decision, asserting that the state government, not the Centre, has authority over taxation on lotteries, as they fall under 'betting and gambling.'

The Supreme Court, in a landmark verdict on Tuesday, dismissed the pleas of the central government and its revenue department, affirming that service tax cannot be imposed on lottery ticket promotions, marketing, or sales.

The ruling, delivered by a bench including Justices B.V. Nagarathna and N.K. Singh, upheld a Sikkim High Court judgment. The court dissected the legislative amendments and history concerning finance laws targeted at lotteries and concluded these amendments failed to alter the principal-to-principal relation between state governments and lottery distributors.

Justice Nagarathna clarified lottery distribution does not amount to providing a service, reinforcing the state's exclusive jurisdiction over lottery taxation as 'betting and gambling' activities.