GST applicability on schemes

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50 Points Joined November 2020
One of my clients wishes to start a scheme where each member has to pay 1000 rs monthly , in return for their payment a lucky draw monthly will be held. prizes will be vehicles gold etc.. for those who haven't won anything they have to opt for a consolation prize at the end of 12 months ... How gst to be worked out here?
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On 05 October 2024 at 09:00 Report
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Master in Accounts & high court Advocate
8827 Points Joined December 2011

This scheme is essentially a lottery or a game of chance, where participants pay a monthly fee to enter a draw to win prizes. From a GST perspective, this is considered a supply of services, specifically, "Gambling services" or "Lottery services". Here's how GST would be worked out: 1. Determine the taxable value: The monthly payment of ₹1000 by each member is the consideration for the gambling service. 2. GST Rate: The GST rate for gambling services is 28% (as per the current GST rates). 3. GST Liability: Calculate the GST liability by applying the GST rate to the taxable value (�1000 x 28% = ₹280). 4. Consolation prize: The consolation prize at the end of 12 months is also a supply of goods or services, and GST would apply accordingly. 5. Registration: Your client may need to register for GST if their annual turnover exceeds the threshold limit (currently ₹40 lakhs). 6. Returns and Payments: Your client would need to file GST returns and pay the GST liability on

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On 07 October 2024 at 13:00


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