Lottery Distributors Not Liable to Pay Service Tax to Centre: Supreme Court

The Supreme Court upheld the Sikkim High Court's ruling, stating that lottery distributors are not liable for service tax.

The Court ruled that the sale of lottery tickets by distributors does not qualify as a taxable service, as there is no agency relationship between the distributors and the State. 

The Court affirmed that lotteries fall under "betting and gambling," which is exclusively within the State's authority to tax under Entry 62 of the State List.

The ruling follows a previous 2024 verdict in K.Arumugham V UOI, which also determined that selling lottery tickets is a revenue activity, not a service.