New Delhi, Feb. 11 -- In a relief to lottery firms such as Future Gaming and Hotel Services Pvt. Ltd, the Supreme Court has ruled that lottery distributors do not have to pay service tax for organizing lotteries.

The court on Tuesday upheld a Sikkim high court decision that struck down a 2010 law imposing service tax on activities like promoting or organizing lotteries.

A bench comprising Justices B.V. Nagarathna and N. Kotiswar Singh ruled that lotteries fall under "betting and gambling", which, under the Indian Constitution, only state governments have the authority to tax.

By dismissing the Union government's appeal, the court reinforced that the Centre cannot impose service tax on such activities.

"There being no agency, no servic...