Drop move to hike GST on lottery, says Kerala

Kerala is strongly opposing the move to hike the Goods and Services Tax (GST) on lottery tickets to 40% under the proposed GST rejig. Such a hike is expected to have serious implications for the State government-run lottery business and livelihoods dependent on the sector.

Commenting on the GST reforms this week, Finance Minister K.N. Balagopal had noted that the move to hike the GST on lottery tickets from 28% to 40% could wreck the Kerala State Lotteries. This would have serious consequences for over two lakh lottery agents and vendors and their families, he said. Mr. Balagopal had raised Kerala’s lottery-related concerns in the meeting of the Group of Ministers which discussed the tax shake-up proposals.

Council meet on Sept. 3, 4

The upcoming GST Council meeting on September 3 and 4 is set to discuss a proposal to restructure the  GST rates by retaining only the 5% and 18% slabs. What has emerged as a matter of concern for the Kerala lottery is a proposed higher, 40% slab on items such as tobacco, online real-money gaming, and lottery.

On Friday, in a petition to Union Finance Minister Nirmala Sitharaman, the the Kerala Lottery Protection Committee led by CPI(M) leader M.V. Jayarajan and comprising MPs from Kerala and trade union leaders in the sector urged the Centre to drop the move to hike the tax on lottery.

‘Not a luxury item’

Pointing out that two lakh people, including the differently abled and the elderly, are dependent on lottery sales for their livelihood, the committee said that lottery cannot be seen as a luxury item. Mr. Jayarajan later observed in a Facebook post that the commission on the sale of a single lottery ticket costing ₹50 to lottery agents and vendors would drop by ₹4 if tax is raised. “In a scenario where the 28% slab is removed, the GST on lottery should instead be reduced to 18%,” Mr. Jayarajan said.

‘Karunya fund will be hit’

The committee also pointed out that the tax hike would adversely affect the Karunya Benevolent Fund, powered by the Kerala lottery, which offers free medical aid for underprivileged sections of society.

From ₹11,892.88 crore in 2022-23, the gross revenue from lottery sales is expected to rise to ₹14,121.14 crore in 2025-26, as per the Budget estimates of the State government. But the government’s profit would be much lower since the prize money, commissions, and related expenses of the State Lotteries department are met from this revenue.