The governing body responsible for overseeing India‘s goods and services tax (GST) system, announced a new dual tax rate on lottery tickets on Sunday, right before the confirmed July 1 roll-out of the new indirect tax regime.

Among the newly introduced tax rates introduced by the GST Council, were higher taxation for privately run lotteries as well as other “luxury” services such as five-star hotels and cinemas.

Arun Jaitley (pictured), Union Finance Minister, announced the tax rate during the 17th GST Council meeting at Vigyan Bhawan, where he stated that the Council reached a decision to charge a 12% GST tax on state-run lotteries that don’t have private marketing and distribution, while private lotteries will be charged with the highest 28% tax rate, as reported by India TV.  According to Jaitley, the GST lottery tax was the focus of many debates by the Council, which subsequently lead them to rule on the amended tax rate. The new GST rate will be applied to the value of the tickets and not the government’s or distributor’s retained margins, according to Jaitley.

Further elaborating on luxury services, Jaitley said, “The council fixed tax rate of 18 per cent for hotel rooms between Rs 2,000 and Rs 7,500. Rooms with tariff above Rs 7,500 will attract 28 per cent tax,” according to the news agency.

According to reports, it was the Kerala state government, who also runs a popular state lottery in India, which asked for higher taxations on private lotteries, while other states supported lower rates. The Kerala local government also launched an investigation in October last year into the single-digit lottery that competed with the state’s own operations in the North, after having filed over 544 court cases since 2011. The government reported at the time that an organized group was behind the private lottery operations and sought to “curb” its activities.

The new taxation rate will put private lotteries in the same tax slab as other “luxurious” activities from the entertainment industry, including renting hotel rooms at tariffs over Rs 7,500 ($116), entries to land-based casinos, and even theme park services.

Jaitley confirmed that the GST Council will meet next on June 30 and that further consultation regarding e-way bills will be addressed but that an alternative or transient rule will prevail until then.

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