Kerala’s Finance Minister, K.N. Balagopal, announced that the state anticipates a drop in revenue from its popular lottery system due to a recent increase in the Goods and Services Tax (GST) on lottery tickets. Speaking to the State Legislative Assembly on Monday, Balagopal clarified that the government has already initiated measures to mitigate this impact without raising the price of tickets.
The GST Council recently raised the tax on lottery tickets from 28% to 40%, a decision made despite strong objections from several states, including Kerala. Minister Balagopal highlighted the detrimental effects this hike has had on the lottery industry, noting that a comprehensive assessment of the full impact would require more time, given that the new GST regulations only came into effect on September 22.
To counter these challenges, the state government has implemented ‘minor adjustments’ to both prize money and commissions paid to lottery agents. Balagopal emphasized that the government’s primary focus remains on safeguarding the lottery sector and protecting the livelihoods of the many individuals who depend on it.
Weekly and Bumper Lotteries
The Kerala State Lotteries department manages both regular weekly drawings and special bumper lotteries, such as the renowned Thiruvonam bumper, which boasts a grand first prize of ₹25 crore. The state’s budget estimates had projected a significant increase in gross lottery sales revenue, climbing from ₹11,892.88 crore in 2022-23 to an estimated ₹14,121.14 crore by 2025-26.
Earlier in the year, Kerala had formally requested Union Finance Minister Nirmala Sitharaman to reconsider the tax increase on lottery tickets. The state had argued that higher GST rates would inevitably lead to a decline in ticket sales, thereby negatively affecting the countless individuals reliant on the lottery industry. Furthermore, Kerala had advocated for states to have the autonomy to determine their own tax rates for lotteries.