Supreme Court dismisses review petition on pre-GST state tax on lotteries

Court's verdict earlier led to legislation brought out by Karnataka and Kerala being declared invalid

The Supreme Court has dismissed a petition to review its decision to allow states to impose tax on lotteries of other states in the pre-goods and services tax (GST) era.

The apex court had earlier set aside orders by division benches of the High Courts of Kerala and Karnataka to not permit respective state legislatures to impose tax on the lotteries conducted by other states, say Sikkim.

The two High Courts had said that the respective state legislatures had no right to do so. It said that taxation contemplated under Entry 62 of list II of the Constitution is on betting and gambling activities which also includes lotteries, irrespective of entities conducting the same.

After the Supreme Court verdict, the Karnataka Tax on Lotteries Act, 2004 and Kerala Tax on Paper Lotteries Act, 2005 were declared valid.

Now, the apex court observed that there was no error apparent on face of record to reconsider the impugned order.

Abhishek Rastogi, founder of law firm Rastogi Chambers, said the point was whether the states would have the legislative competence to tax lotteries in their state and this aspect was addressed by the apex court.

After implementation of GST, taxes on betting and gambling were specifically removed from the state list, he pointed out.