Skill Lotto Solution Pvt. Ltd. v. Union of India

Quick Summary

Skill Lotto challenged GST on lottery (and similar activities). The Supreme Court held the levy is constitutional. Lottery, betting, and gambling are res extra commercium—outside normal commerce—so the State may regulate and tax them. The Court also found no unconstitutional discrimination.

Issues

1. Is the writ petition under Article 32 maintainable?
2. Is the inclusion of lottery as goods under the GST Act constitutional?
3. Should lottery, betting, and gambling be taxed under GST?

Rules

• GST Levy Valid: GST on lottery, betting, and gambling is constitutionally valid.
• Res Extra Commercium: These activities lie outside normal commerce; the State has wider powers to regulate and tax.
• No Discrimination: The rate/structure is not unconstitutional where a rational basis exists and exemptions/concessions operate by law.

Arguments

• Constitutional Validity: GST on lottery, betting, gambling is valid.
• Res Extra Commercium: Because these activities fall outside ordinary commerce, the State may regulate & tax them extensively.
• No Discrimination: The framework is not unconstitutional merely for treating these activities differently.

Ratio Decidendi

Inclusion of lottery as actionable goods under GST and the levy on lottery, betting, and gambling are within constitutional bounds. Their status as res extra commercium justifies classification, regulation, and taxation by the State.

Why It Matters

• Confirms GST jurisdiction over lottery/betting/gambling.
• Clarifies use of res extra commercium in tax policy.
• Assures States/Union of a stable regulatory-tax base for such activities.

Key Takeaways

• GST Validity: Levy stands for lottery, betting, gambling.
• Classification OK: Treating lottery as “goods” for GST passes muster.
• No Unfairness: Policy differences have rational justification; exemptions exist within the law.

Mnemonic + 3-Step Hook

Mnemonic: “Lotteries Lie Outside, So Levy Lies Inside.”

1. Locate: Is the activity res extra commercium?
2. Legislate: If yes, the State can classify, regulate, and tax.
3. Legitimise: Check rational basis and built-in concessions.

IRAC Outline

Issue: Maintainability under Article 32 and constitutional validity of GST on lottery, betting, gambling.

Rule: Activities are res extra commercium; the State may regulate/tax; classification under GST as goods is permissible.

Application: Policy has rational basis; concessions/exemptions exist; no violation of equality shown.

Conclusion: GST levy upheld; no unconstitutional discrimination.

Glossary

Res Extra Commercium

“Outside commerce” — activities the State may tightly regulate and tax.

Article 32

Right to approach the Supreme Court for enforcement of fundamental rights.

Actionable Goods

For GST, certain intangibles/rights treated as goods for levy purposes.

FAQs

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