Kerala’s revenue from lottery may see a dip after GST hike, says Finance Minister K.N. Balagopal
The State government’s revenue from lottery is likely to see a dip on account of the tax hike on lottery tickets, Finance Minister K.N. Balagopal has said. In a written reply to the State Legislative Assembly on Monday, Mr. Balagopal said the government had taken steps, without hiking the ticket prices, to address the situation created by the Goods and Services Tax (GST) hike on lottery tickets.
Despite protests from States, including Kerala, the GST Council had hiked the tax on lottery tickets from 28% to 40%. Stating that the hike has adversely affected the lottery sector, Mr. Balagopal said the government would need more time to properly assess the impact of the GST hike on lottery, as the latest GST reforms had taken effect only on September 22.
However, in view of the development, the government had made “nominal reductions” in the prize money and agent commission, he said. Prime importance has been given to protecting the sector and the livelihood of the people dependent on it, he said.
Weekly lotteries
The Kerala State Lotteries department operates weekly lotteries as well as bumper lotteries such as the hugely popular Thiruvonam bumper which carries the highest first prize of Rs.25 crore. As per the Budget Estimates, the State government was expecting the gross revenue from lottery sales to go up from Rs.11,892.88 crore in 2022-23 to Rs.14,121.14 crore in 2025-26.
Earlier this year, the State government had urged Union Finance Minister Nirmala Sitharaman not to increase the tax on lottery tickets. An increase in GST rates would reduce ticket sales, thereby affecting people dependent on the sector, the State had argued. Kerala had also urged the Centre to allow States to fix the tax rate for lotteries within their jurisdiction.
