Tax evasion by lottery distributors
12 cases of GST evasion of Rs. 344.57 crore detected and Rs. 621.56 crore recovered against lottery distributors between July, 2017 to November 2023
A reference was received from Ministry of Home Affairs (MHA) for comments regarding disbursement of prize amount of lotteries through formal banking channel and comments in this regard have been sent to MHA. This was stated by Union Minister of State for Finance Dr. Bhagwat Kisanrao Karad in a written reply to a question in Lok Sabha today.
Elucidating further, the Minister stated that using formal banking channel for any kind of transaction, including disbursement of lottery prize, is helpful in mitigating the associated money laundering/terrorist financing / proliferation funding risks in view of the robust banking system and effective regulation/supervision of the regulated entities.
In reference to the Section 194B of the Income-tax Act, 1961 (‘the Act’), the Minister stated that the person responsible for paying to any person any income by way of winnings from any lottery or crossword puzzle or card game and other game of any sort or from gambling or betting of any form or nature whatsoever, being the amount or the aggregate of amounts exceeding ten thousand rupees during the financial year shall, at the time of payment, deduct income-tax at the rates in force.
The Minister further stated that vide Finance Act 2023, the rate in force is 30%. This also includes winnings in kind or partly in cash and partly in kind. It is substantively charged to tax at the rate of 30% under section 115BB of the Act and no deduction on the winnings is allowed.
On the question of tax evasion by lottery distributors, the Minister stated that the Income Tax Department takes appropriate action in cases involving evasion of tax whenever any credible information/intelligence of violation of provisions of Direct Tax Laws relating to any taxpayer comes to its notice. Such action under Direct Tax laws includes conducting enquiries, mounting search and seizure or survey action, assessment and consequential actions thereto, wherever applicable as per the provisions of the Act. Twelve (12) cases involving GST evasion of Rs. 344.57 crore have been detected against lottery distributors and Rs. 621.56 crore (including interest and penalty) has been recovered/ realised from July, 2017 to till November 2023.
CAclubindia
