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2018 (11) TMI 886 - AAR - GSTLevy of IGST u/s 5 (3) of IGST act, 2017 - supply of lottery tickets by the organising state - applicability of Serial No.5 of N/N. 4/2017 - Integrated Tax (Rate) - Reverse charge mechanism - Held that - Applicant is recipient of supply in the form of lottery and is located in Maharashtra. The supplier of lottery is the State Government of Mizoram which is located outside State. Therefore as per the provisions of Section 7(1) of the IGST Act, the transaction shall be treated as a supply of goods in the course of interstate trade or commerce - In view of Section 5(3) of the IGST Act, N/N. 4/20171ntegrated Tax (Rate) dated 28.06.2017 has been issued which provides the description of goods in respect of which Integrated Tax shall be paid on Reverse Charge basis by the recipient of the Inter-State supply of such goods. The supplier of Lottery in the present case is the State Government of Mizoram and the recipient of supply i.e. Lottery distributor or Agent, is the applicant in the present case who is located in Maharashtra and therefore the applicant is liable to payment of IGST under Reverse Charge mechanism as per the provisions and Notification referred. Ruling - Applicant is liable to pay IGST under section 5 (3) of IGST Act, 2017. Serial No.5 of Notification No. 4/2017 - Integrated Tax (Rate) is applicable on supply received by the applicant.
Issues Involved:
1. Liability of the applicant to pay IGST under Section 5(3) of the IGST Act, 2017. 2. Applicability of Serial No. 5 of Notification No. 4/2017 - Integrated Tax (Rate) on the supply received by the applicant. Detailed Analysis: Issue 1: Liability to Pay IGST under Section 5(3) of the IGST Act, 2017 Facts and Contentions: - The applicant, acting as a distributor or marketing agent of lottery schemes organized by the State Government of Mizoram, procures online tickets for distribution across Maharashtra. - The applicant is registered under GST to pay GST under the Reverse Charge Mechanism (RCM) on the supply of lottery tickets by the organizing state. - The rate of GST prescribed on lottery tickets is 28% if the lottery scheme is authorized by the state, and this rate is undisputed. - Section 5(3) of the IGST Act empowers the government to specify categories of supply of goods or services on which tax shall be paid on a reverse charge basis by the recipient. Observation: - The applicant is the recipient of the lottery supply and is located in Maharashtra, while the supplier (State Government of Mizoram) is located outside Maharashtra. - As per Section 7(1) of the IGST Act, the transaction is treated as an inter-state supply. - Notification No. 4/2017 - Integrated Tax (Rate) specifies that the tax on the supply of lottery tickets shall be paid on a reverse charge basis by the recipient. Judgment: - The applicant is liable to pay IGST under Section 5(3) of the IGST Act, 2017, as the supply of lottery tickets by the organizing state to the distributor in Maharashtra constitutes an inter-state supply. Issue 2: Applicability of Serial No. 5 of Notification No. 4/2017 - Integrated Tax (Rate) Facts and Contentions: - The applicant contends that the supply of lottery tickets is covered under the RCM as per Notification No. 4/2017 - IGST (Rate), and the applicant is liable to pay IGST. - The applicant argues that any other interpretation would render Serial No. 5 of Notification No. 4/2017 obsolete and useless. Observation: - Notification No. 4/2017 - Integrated Tax (Rate) includes the supply of lottery tickets under the RCM, where the supplier is the State Government, Union Territory, or any local authority, and the recipient is the lottery distributor or selling agent. - The applicant, being the lottery distributor located in Maharashtra, is the recipient of the supply from the State Government of Mizoram. Judgment: - Serial No. 5 of Notification No. 4/2017 - Integrated Tax (Rate) is applicable on the supply received by the applicant, confirming that the applicant is liable to pay IGST under the RCM. Order: For the reasons discussed, the questions are answered as follows: 1. Question: Whether the applicant is liable to pay IGST under Section 5(3) of the IGST Act, 2017. Answer: Answered in the affirmative. 2. Question: Whether Serial No. 5 of Notification No. 4/2017 - Integrated Tax (Rate) is applicable on the supply received by the applicant. Answer: Answered in the affirmative. Citation: 2018 (11) TMI 886 - AUTHORITY FOR ADVANCE RULING, MAHARASHTRA
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