The Goods and Services Tax (GST) on lottery tickets in Kerala is set to rise dramatically to 40% starting Monday, September 22. This change comes as new, restructured GST slabs are implemented by the State GST department.
Dispelling earlier misconceptions, the department clarified that previous reports suggesting the 28% tax rate would remain in effect for lotteries were inaccurate. According to the revised GST rates, which were approved by the GST Council on September 3, lottery tickets are now grouped with products like cigarettes, beedis, gutka, and pan masala, all of which will be subject to a new 40% tax.
It’s important to note that while the 40% tax is applicable to these other items, its implementation for them will occur on a separate, yet-to-be-notified date. For now, the existing rates will continue for tobacco and related products.
However, the increase to 40% GST on lottery tickets will indeed take effect on September 22, as confirmed by official notifications from both the Central and State governments.
The Kerala government has expressed strong opposition to this move, as lottery ticket sales represent a substantial revenue stream for the state. In a formal communication to Union Finance Minister Nirmala Sitharaman, the state highlighted that its lottery system provides sustenance for nearly two lakh individuals. They argue that a hike in GST rates will inevitably lead to decreased ticket sales, thereby jeopardizing the livelihoods of this large population. Kerala has also advocated for states to have the autonomy to determine their own tax rates for lotteries.