PIL seeks CBI probe into tax evasion by lottery firms

by Shibu Thomas,TNN | India Times


MUMBAI: A PIL has been filed in the Bombay high court seeking a CBI probe into alleged tax evasion to the tune of Rs 5,000 crore by companies conducting online lotteries.

Maharashtra has enacted the Lottery Tax, which seeks to tax online gambling. As per the law, lottery companies have to pay the tax in advance.

The petitioners, who are residents of Mumbai, Hyderabad and Ahmedabad, claim that the lottery companies are not paying tax. “The companies conduct multiple lotteries in one draw and evade tax to the tune of crores,’’ said advocate Mohan Tekavde.
The tax imposed by the state is Rs 50,000 per draw. But many of these lotteries of Sikkim and Andra Pradesh, with servers in Maharashtra, hold as many as 10 draws. The modus operandi is to announce prize money for a draw, but when there is no winner, the amount is rolled over to the next draw.

They, however, pay tax for only one draw, resulting in loss to the state. The advocate referred to the Maharashtra government’s statement in its budget, where it has admitted to losing revenue of over Rs 6,500 crore, because of non-recovery of taxes, including lottery tax.

The petitioners alleged that the companies are selling online lotteries through private cash cards, violating norms set by the Reserve Bank of India. “Crores of rupees worth of sales go unaccounted for,’’ the PIL said. The petition is scheduled to come up for hearing in June.