The central government has reduced GST rates to give relief to the common man.
However, some items such as tobacco, luxury goods, and lotteries have been placed in a special 40% slab.
This means lotteries will now attract 40% GST with input tax credit, up from the earlier 28% rate.
This decision has upset people linked to the lottery business, especially in Kerala.
In late August, an all-party delegation of MPs and trade union leaders from Kerala submitted a memorandum to Finance Minister Nirmala Sitharaman, requesting that the GST hike on lotteries be rolled back.
Effect on Lottery Business
The lottery business has already faced challenges with rising GST rates.
When GST was first introduced in 2017, tickets were taxed at 12%.
In 2020, the rate went up to 28%, increasing ticket prices from ₹30 to ₹40 and later to ₹50, which reduced sales.
Now, with the tax raised to 40%, ticket prices are expected to rise further, creating a risk of even weaker sales and affecting the industry.
Kerala’s Stand: “Lottery Is Not a Luxury Product”
Lottery sellers in Kerala argue that lotteries should not be treated like luxury products. They demand that the tax rate be reduced to 18% instead of 40%.
Kerala is India’s largest lottery market.
According to AngelOne, the state contributes about 97% of the country’s total lottery revenue.
As per a report by keralakaumudi.com, Kerala earns around ₹14,000 crore annually from lottery sales.
Out of this, nearly ₹3,000 crore goes as tax and about ₹450 crore remains as profit.
