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Author: Rayma Simran. C, pursuing LL.M. from CMR University


Lottery is a gambling game or one type of gambling game by which people buy a ticket which numbered and chosen number, people who have the same numbered ticket will get the prize. This research paper will give the idea about the lottery as goods under sale of goods act it is also define in Black’s law dictionary “ lottery” is defined that is a chance for a price. It is a movable property according to the act, In case of H. Anraj court gave the decision that lottery ticket is a memorandum evidence that evidencing the transfer of some kind of goods or it is a slip of paper .


‘Goods’ is defined under section 2(7) in sale of goods Act which means that all kind of movable property, which is not included other than actionable claim and money and includes stock and shares, even it includes growing of crops grass especially things which are attached to forming part of the ground or land agreed to be severed under the contract of sale.

‘Lottery’ it is a form of gambling which is conducted by state and central government rather than government no private sector can have a lottery office, if they are having then it is a punishable offence. However if private sector want to have a lottery office it can be done with the permission of government and they should provide a license for the private vendors.

Lottery means it is a type of gambling which involves drawing of numbers at random for a gift or prize at present government of India banned lottery ticket and the most common prohibition is sale to minor and as mentioned above, vendors must be licensed to sell the tickets even though it is banned in India, still in most of the countries are practicing countries like United States from the beginning of 20th century only they are practicing lottery.

Lottery regulationsAct 1998

Lottery regulations Act 1998, it clarify the scheme of lottery it meant to distribution of prize which is given to the person who gets chance or luck by purchasing the same numbered lottery ticket unlike in any other business, trade, commerce as similar as them even in the lottery regulations Act 1998 also have rules and regulations given by Supreme Court.

Supreme Court clarify or explain the different between trade and gambling to prove that the intention of the legislature is based on constitutional and useful, where gambling is a chance or a luck by which a person get prize without any skill contain, Trade is were you have been profitedby using your own skill. Even though lottery is organized by state, as it is gambling it can not be a trade or commerce, according to the Article 301 and 303 of Indian Constitution.

Lottery is a gambling comes under the Doctrine of respect extra Commeruim, lottery even it’s a gambling and not good or not encouragable tillit is organized by state in the view of economy and to raise revenue, by lottery government can raise revenue a lot now the question arise is whether lottery is a goods under sale of goods act.

Lottery is defined as a chance for a prize for a price, which is define as per Black’s law dictionary according to this Act the lottery tickets are clearly movable property, however this topic is still arguing matter that whether it is a actionable claim. The Supreme Court held in H. Anraj case that lottery ticket is a memorandum evidence transfer of a certain rights and lottery ticket is just a slip of paper which as the rights only that, the sale of this ticket does not really involved the sale of goods but a lottery ticket can be held to goods only because it evidencing the transfer of certain right.

Lottery as goods under SOG Act

When the question arise regarding lottery tickets whether they fall under the definition of an actionable claim to answer these question there are 2 important cases are as followed

1) H. Anraj vs Government of Tamil Nadu

In this case writ petition and the civil appeal raise a question that whether sales tax can be levied by state legislature on the sale of lottery tickets, this question raise because first time levy imposed in sales of lottery tickets which is done by an amendment made in Tamil basically general sales tax Act 1959 these were came into effect from 28/1/1984 as same similar amendment was made first time in Bengal financial Act 1914 which came into effect from 1/5/1984 .

The sale of lotteries are done by the central government or state government if in case absent of any law the parliament can run the lotteries and executed by any state government as so the present gave permission or permit of the government of Tamil Nadu to conduct the lottery tickets, but those ticket shall not be sold rather the Tamil Nadu without the permission of the state government.

Therefore the levy sale tax on sale of lottery tickets would beyond the extent of entry 54of list II by express in lottery ticket was ‘goods’ if all only evidences the certain transfer of right because it is goods which come under SOG Act were thus liable to be taxed.

2) Sunrise association vs Government of NCT of Delhi and others

Following judgment of the case in H. Anraj vs govt of Tamil Nadu 1986 it was held that lottery ticket are considered as a ‘goods’ under SOG Act more over it is liable for sales tax. It also said that when the sale of lottery ticket the transfer of the right to the person it take place by lottery draw, which amounted to transfer of the transfer of the goods and it lottery the prize (goods) will be transferred to the participant by luck or chance depending so it is an actionable claim.

In this case the argument about, is there is no sale of goods when state government organized and sale the lottery tickets if is so then there is no tax either, so in this case of H. Anraj the Prima Facie is also considered.That the participant as right to draw and as the right to win prize by chance or luck because this H. Anraj judgment required reconsideration and these was agreed by a bench of 3 judges thought it is necessary for appeal.

The expression and meaning of sale of goods Act were considered lottery ticket even though there are movable property they are generally speaking goods, so they are not ‘goods' for the purpose of sales tax laws and also they fall under definition of actionable claim, according to sunrise association case the sale if lottery ticket amount to sale of lottery ticket amount to sale of an actionable claim.

Levy of GST on Lottery

Lottery is known actionable claim, actionable claim is defined under section 2(1) of the Act that express ‘actionable claim’as that shall have the same meaning as assigned to section 3 of the Transfer of property Act it defines it is a claim to any debt, leaving secured debt by mortgage of movable property.

“lottery Supply” list of activities given in the schedule III say that it shall be treated neither as supply of goods nor even supply of service. In the list provided in entry 6 of schedule III says that actionable claim leaving gambling, lottery, betting. Therefore comes under the term supply.

GST rate on lottery, council meeting held for 17th GST, this council meeting approved some notice those are as follows

  • 12% of the face value of lotteries run by the state govt

  • 28% of the face value of lotteries run by the authorized state government

The tax levied by government as a sole selling agent who are appointed by the state government to distribute the lotteries even the intra-state also done by state government.

Challenge before High Court on levy of GST on lotteries

In the case Teesta Distribution and others vs Union of India 2018 Calcutta High Court. In this case the petitioner submitted the petition before high court saying that lottery cannot be defined as ‘goods', because in our constitution goods defined as something which is able to transferred for cash, payment or other valuable consideration is known as goods, here lottery is just a prize which is received by dependence chance.

Therefore lottery means a scheme that which ever formed any name called the participants for the distribution of prize by chance for the participants by purchasing tickets, so the transfer of goods by sale of lottery ticket is not transferring a movable property or a actual transfer of goods. Even more clearly to say the person whoever sell the lotteries is not selling any kind of goods or the purchases buying any goods either.

Lottery ticket can not be defined as goods under, CGST Act or SGST Act either since the lotteries clearly know as neither goods nor service so it is not liable to be taxed if CGST and IGST imposed tax towards lottery it is unconstitutional, because lottery is not a goods which said in the constitution as mentioned above the state nor central can enact law of levying sales tax on the lottery.

West Bengal government submitted to High Court

The petition includes thatlottery is a actionable claim which also included in the definition of goods, but it is not a commodity market that can be bought against the consideration on payment consideration of property purchase.

The legislature of the state and the parliament as authority to competence to levy tax on any item, the items which also included lottery, were the permission is given to the state government to choose any districts, vendors, distributors, procedure and rate of taxation also the legislature as a wide classification in taxation were as a statute cannot be just said it is a unconstitutional solely on the ground of unreasonable. Inthe constitution of India the business of lottery character of betting, gambling are not at all carried a right to practice, since it is a question of violating fundamental rights so the lottery business is not constitution protection under Article 226.

The High Court gone through all the petition submitted by Central Goods and Services tax Act 2017 and West Bengal Goods and Services tax Act 2017

  • First issue lottery an actionable claim

  • Second issue levy of GST on lotteries

  • Third issue levy of different taxes on lottery

  • Fourth issue relief the petition

  • First issue -relief to the petitioner

After hearing various provisions of the act defined goods and various judgements of Supreme Court in H. Anraj vs state of Tamil Nadu 1985, high court observed 2 rights to confer the purchaser

1) Participants have right to draw the lottery tickets

2) Right to claim the prize after successfully drawing the lottery tickets

  • Second issue – levy of GST on lotteries

The classification of taxation by the legislature to regulate the levy and collection of tax on the state or intra-state supply of the goods or services or even both in west Bengal after the constitutional amendment incorporated CGST Act and IGST Act 2017.

  • Third issue – levy of different taxes on lottery

The rational for the differential rates was imposed on the 17th meeting of government don’t as the authority to challenge any notifications as unconstitutional. In the case present by the states like Arunachal Pradesh, Sikkim, Mizoram, Nagaland also supported the writ petition only for such states present in GST council meeting carried by majority request.

  • Fourth issue –relief to the petitioner

After considering the petition given by these states as mentioned above, the High court held no relief will be granted for the petitioner, and dismissed the writ petition of the present case.


In Indian the Supreme Court ordered all the states government to banned lottery tickets, but most of the states are refused to the Supreme Court order and filed a petition by this only half of the states have been banned the lottery tickets rest are not. Totally 13 states are not banned the lotteries and still they are legally running lottery business the reason they provided is to run a lottery ticket business they have there fundamental rights.

Refusing 13 states rest of other states lotteries are banned, those 13 states are Mizoram, Nagaland, Maharashtra, Kerala, Madhya Pradesh, Goa,Assam, Arunachal Pradesh, Sikkim, Manipur, Meghalaya, and West Bengal . The states like Tamil Nadu and Karnataka completely banned the lotteries. Lottery ticket banned is not for the online players were as playing lotteries in online is completely legal, we can also purchase lottery tickets in online Indian website which is legal.


· Robert Eadie, Random selection: Winning the lottery in construction contracts, Research Gate, available at :-

· Ankita Jain, Indian Lottery Market Research : Online and offline, Research Gate, available at :-

· Sharad Vadehra, Legality of Lottery in India,, available at :-

· Aklileshwar Pathak, Legal Responses to Economic Liberalization : The case of Unfair Trade Practice, Research Gate, available at :-

· Sanju George, The Story Of The Lottery Addict in India : Who is responsible and what are it’s policy implications?, Research Gate, available at :-


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