GST on lotteries increased to 40% despite Kerala's plea
What's the story
The Indian government has increased the Goods and Services Tax (GST) on lotteries from 28% to a whopping 40%. The decision, which also applies to gambling, betting, casinos, horse racing, and online gaming, was announced by Finance Minister Nirmala Sitharaman. However, the move has drawn sharp criticism from several leaders and unions in Kerala.
Opposition response
All-party delegation submitted memorandum to Sitharaman
In late August, an all-party delegation from Kerala, including MPs and trade union leaders, submitted a memorandum to Sitharaman. They requested government to reconsider its decision to increase the GST on lotteries from 28% to 40%. The delegation included CPM state committee member Jayarajan and Rajya Sabha MPs V Sivadasan (CPM), P Santosh Kumar (CPI), CITU leaders P R Jayaprakash and T B Subair, INTUC's Philip Joseph, V Balan of AITUC, and J Jayakumar of Kerala Lottery Thozhilali Association (KLTA).
Industry impact
Unjust decision, say Kerala leaders
The all-party delegation argued that the GST hike would devastate Kerala's thriving lottery industry. They described the decision as "unjust," saying it would hurt those who depend on lotteries for their livelihood. The memorandum noted that over two lakh handicapped, aged, and sick people earn their living from selling tickets, and a similar fate could befall them with this tax hike.
Tax history
Ticket prices have already been affected by previous GST hikes
When GST was first introduced, it levied a 12% tax on lottery tickets. In 2020, this was increased to 28%. The hike resulted in an increase in ticket prices from ₹30 to ₹40 and later ₹50, which affected sales. Now with the latest increase to 40%, there are fears of a similar impact on ticket sales across India.
Financial implications
Nearly 97% of India's lottery revenue comes from Kerala
Kerala is a major player in India's lottery market, accounting for nearly 97% of the country's total lottery revenue. The state generates annual lottery sales worth around ₹14,000 crore. Of this, approximately ₹3,000 crore is paid as tax, and about ₹450 crore remains as profit. This money goes toward funding various welfare schemes. However, if GST rates are increased to 40%, it could severely affect these finances.