Section 15 of the GST Act, 2017, itself doesn’t define the value of supply for activities like lottery, betting, gambling, or horse racing. However, specific provisions for determining their value are laid out in Rule 31AGST ACT2017 of the Central Goods and Services Tax (CGST) Rules, 2017. Here’s a breakdown:

For Lotteries:

• State-run lotteries: The value of supply is 100/128 of the higher of two amounts:
  • Face value of the lottery ticket
  • Price notified in the Official Gazette by the organizing state
• Other lotteries: The general rules under Section 15 and other relevant rules would apply.

For Betting, Gambling, and Horse Racing:

• The value of supply is 100% of the higher of two amounts:
  • Face value of the bet
  • Amount paid into the totalisator (a machine that automatically records and totalizes bets)

Important Additional Points:

• These special rules in Rule 31A GST Act, 2017, override the general valuation provisions under Section 15 for the mentioned activities.
• The “Organizing State” in the context of lotteries refers to the state authorized GST Act, 2017, to conduct the lottery, as defined in the Lotteries (Regulation) Rules, 2010.

Remember, GST rules and interpretations can be complex. For specific and detailed guidance on your particular situation, it’s always advisable to consult a qualified tax professional.

EXAMPLE

Unfortunately, the information you provided has some inaccuracies. Firstly, there is no Section 15 in the GST Act, 2017, that deals with the value of supply for lotteries, betting, gambling, and horse racing. The relevant provision is Rule 31A of the CGST Rules. Additionally, Rule 31A doesn’t mention a specific state; it provides different formulas based on the type of lottery and its authorization.

Here’s the accurate breakdown of the value of supply under Rule 31A:

Lotteries:

• State-run lotteries (not allowed for sale outside the organizing state): 100/112 of the face value of the ticket or the price notified in the Official Gazette by the organizing state, whichever is higher.
• State-authorized lotteries (allowed for sale in other states): 100/128 of the face value of the ticket or the price notified in the Official Gazette by the organizing state, whichever is higher.

Betting, Gambling, and Horse Racing:

• Value of the actionable claim (the chance to win): 100% of the face value of the bet or the amount paid into the totalisator.

Example Application:

Let’s assume you participate in a lottery authorized by the Tamil Nadu government, and the face value of your ticket is ₹100. In this case, the value of supply (on which GST will be calculated) would be:

• 100/128 * ₹100 = ₹78.125