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2010 (7) TMI 947 - HC - VAT and Sales TaxWhether the nature of the transactions between the State Government and distributors in relation to lottery tickets is not in the nature of sale? Held that:- The value of lottery tickets without the promotional and marketing activity of the petitioner is 70 paise, which by reason of marketing and promotional activity of the petitioner becomes ₹ 1 when the same reaches the ultimate purchaser of lottery tickets. The petitioner thus makes a value addition to the activity of organizing or conducting or promoting games of chance as that of lottery by the State Government from 70 paise to ₹ 1 by providing marketing and promotional service thereto by its activities as above. There is thus value addition by the petitioner in relation to game of chance, organized, conducted or promoted by the client of the petitioner, namely, the State Government. It was not urged that the residuary clause contained in List I of the Seventh Schedule to the Constitution of India or entry 92C thereto does not authorize levy of service tax on service provided in relation to an activity which though may not be service or which may be res extra commercium, but a legal and permissible activity. Appeal dismissed.
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