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Service tax doubt

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deepa

student

40 Points Posted on 26 May 2013

Hi! Can anyone please explain in depth and clear cut understanding of "GAMES OF CHANCE (LOTTERY SCHEME)", its conditions and with practical problem with a step by step solution. I cannot understand that one. For your reference i have given you the rate and condition. Take a look please.

Games of Chance Service [Rule 6(7C) of the Service Tax Rule, 1994]

RATE:

Rs 7000/- on every Rs 10 lakh (or part of Rs

10 lakh) of aggregate face value of lottery tickets

printed by the organising State for a draw.

CONDITION:

If the lottery scheme is one where the

guaranteed prize payout is 80% or more.

RATE:

Rs 11000/- on every Rs 10 lakh (or part of Rs

10 lakh) of aggregate face value of lottery tickets

printed by the organising State for a draw.

CONDITION:

If the lottery or lottery scheme is one where

the guaranteed prize payout is less than 80%.

Note : In case of Online Lottery, the aggregate face value of lottery tickets will be the aggregate

value of tickets Sold.

Thanx in advance. Godspeed.

Replies (1)

Vaneet Bansal

learning new things

87 Points Posted on 26 May 2013

Hi Deepa

First Of all i want to say u that u have allready mention clear cut defination.

lets start with the first example , suppose u r administrative of lottery tickets and u printed no. of lotteries of 1 crore of Rs. 100 each. and u have declare to distribute funds of minimum 80 lacs(80%) then u have to pay service tax Rs. 70000(Rs. 7000 for every 10 lacs) but in case u distibute fund which is less than 80 lacs then u have to pay service tax 110000(Rs. 11000 for every 10 lacs).

In case of online tickets lotteries of rs. 1 crore but u able to sell lotteries of rs, 90 lacs and u declare to distibute 72 lacs or more (80% of 90 lacs) then u have to pay service tax of rs. 63000 and if u ditribute less then 72 lacs then service tax will be rs. 99000.

I hope it will make u understand in simple way

All the best