Withering lottery industry once again implores govt to relax GST rates

The current Goods and Services Tax (GST) structure of 28% tax on face value of lottery tickets sold through lottery distributors and 12% tax on face value of lotteries sold directly by state governments has crippled the lottery industry, according to leading lottery distributor conglomerate, Sugal and Damani Group.

Industry veterans believe that the GST Council’s decision has led to reduction of lottery terminals and sales by almost 70%, and in case the governments fails to reconsider its decision, it would result in loss of thousands of jobs and diminishing turnover, resulting in even lesser tax collections.

They point out that effective overall tax incidence of service tax and lottery tax was 6.71% on the face value in the pre-GST era whereas now it is nearly 28% on the face value including prize money that is a whopping 300% increase in the tax incidence.

According to Kamlesh Vijay Group CEO of Sugal & Damani, “To sort out the differences in the views among the state’s the GST Council had constituted an eight-member Group of Ministers earlier under the Chairmanship of Maharashtra Finance Minister Sudhir Mungantiwar to look into various issues relating to GST on lottery and in the last meeting and the council decided to seek legal opinion from Attorney General on the issue.

One of the main impending issues is the differential tax treatment of lotteries between State government run and State government authorized lottery. Currently 12% GST is being charged on lotteries run by State Governments (a lottery not allowed to be sold in any State other than the organizing State) directly, while a 28% tax rate is being levied on the lottery tickets authorized by state governments (a lottery which is authorized to be sold in State(s) other than the organizing State also). This huge difference in the tax rate on the same commodity acts as a tariff barrier for smaller states like Goa, Sikkim, Arunachal Pradesh etc. when their tickets are sold in other bigger States like West Bengal or Kerala.

A counterproductive move was recently done by Kerala legislative assembly by passing a unanimous resolution urging the Central Government to withdraw the move to bring uniform GST rate on lottery. ”

Sugal & Damani and other lottery companies are consequently demanding that a single GST rate and structure be levied for state-run lotteries sold through distributors or directly through the state government machinery.

They suggest that the tax rate should either be 5% of the face value of the lottery ticket or 28% of the margin retained by the lottery distributors/state government, i.e. MRP of the lottery ticket minus prize payout.

Private lottery companies have consistently protested and demanded a relaxation in the taxation structure for the industry, without finding much favour with the GST Council, due to strident opposition from the Kerala government.


Kerala assembly passes resolution against uniform GST for lotteries, deadlock in GoM over lottery tax rate

The Kerala legislative assembly passed a unanimous resolution urging the Central Government to withdraw the move to bring uniform Goods and Services Tax (GST) rate on state-run lottery and other state lotteries.

As per news reports, the legislative assembly passed the resolution moved by state Finance Minister Thomas Isaac after a discussion over it on the floor of the House.

“The Centre’s move is to reduce the tax on lotteries run by intermediaries and bring it on par with the state-run lotteries. This will affect thousands of lottery agents and sellers in Kerala.

This move will affect the tax revenue of the state, as well as the Centre,” Isaac said.

Currently, 12% GST is being charged on lotteries sold by state governments directly, while a 28% tax rate is being levied on the face value of lottery tickets authorised by state governments but sold through private lottery distributors.

Private lottery companies have made several representations against this discriminatory and high rate of tax, and claimed that the taxation structure would cripple and destroy their business. 

In a related development, it has been reported that the eight member Group of Ministers (GoM) headed by Maharashtra Finance Minister Sudhir Mungantiwar, that had been tasked by the GST Council to study the differential tax rates on lotteries, has so far, failed in its efforts to recommend a uniform tax rate for lotteries.

According to media reports, the panel failed to reach a consensus after representatives of West Bengal and Kerala opposed  the idea, citing loss to state governments.

The GST Council is slated to discuss the issue on 21st June, although a decision on the issue is unlikely, given the lack of consensus on the issue.

Read more about Kerala State Lotteries – Taxes, prices and prizes.


Kerala state lotteries – types, tax, prizes, and prices

Kerala State Lotteries is a lottery program organised by the state government of Kerala.

Lottery is a type of gambling in India, in which tickets with different number combinations are purchased by participants, and numbers are drawn at random from a pool to announce the winners.

In this article, read about Kerala state lottery:

In the year 1967, when all the private lotteries were banned, the then Finance Minister of the state, P. K. Kunju Sahib, proposed the idea to set up a Lottery department under the Government of Kerala. The objective behind this was to generate employment and supplement the state’s revenue.

The Lottery department was earlier placed under the Department of FInance, but was later moved under the Department of Taxes.

After the success of this model, some other states in India also adopted it and launched their own state lotteries.

The Directorate of the department is located in Vikas Bhawan at Thiruvananthapuram. It has 14 district offices and a Regional Deputy Directorate at Ernakulam.

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Types of Kerala State Lotteries

There are seven different types of weekly Kerala lottery draws conducted by Kerala State Lottery Department. They have different price and prize sturcutures.

Kerala state lottery Pournami has the first prize of Rs. 70 lakhs, the second prize of Rs. 5 Lakhs, the third prize of Rs. 1 Lakh, and a consolation prize of Rs. 8000. The price of a single ticket of the lottery is Rs. 30 and that of a book is Rs. 750. The draw for Pournami Kerala lotteries are held on Sunday.

Kerala lottery called Win Win has the first prize of Rs. 65 lakhs, the second prize of Rs. 10 Lakhs, the third prize of Rs. 1 Lakh and a consolation prize of Rs. 8000. The price of a single ticket of the lottery is Rs. 30 and that of a book is Rs. 750. The draw for Win Win Kerala lotteries are held on Monday.

Kerala state lottery Sthree Sakthi comes with the first prize of Rs. 60 lakhs, the second prize of Rs. 5 Lakhs, and a consolation prize of Rs. 8000. The price of a single ticket of Sthree Sakthi is Rs. 30 and that of a book is Rs. 750. The draw for Sthree Sakthi Kerala lotteries are held on Tuesday.

Akshaya Kerala lottery has the first prize of Rs. 60 lakhs, the second price is Rs. 50 lakhs, and the third price is Rs. 1 lakh. The consolation prize of the lottery is Rs. 8000. The price of s single ticket is Rs.30 and that of a book is Rs. 750. Kerala state lotteries Akshaya are drawn on Wednesday.

Karunya Plus Kerala lottery has the first prize of Rs. 80 lakhs. Its second prize is for Rs. 5 Lakhs and the third prize is for Rs. 1 Lakh. The consolation prize for Karunya lottery is Rs. 8000. The price of a single ticket of this lottery is Rs. 40 and that of a book is Rs. 1000. Karunya Plus Kerala lottery draw is held every Thursday.

Nirmal Kerala State lottery has the first prize of Rs. 60 lakhs. The second and third prizes for this lottery are Rs. 5 Lakhs and Rs. 1 Lakh, respectively. Its consolation prize is Rs. 8000. One can buy its single ticket for Rs. 30  and the entire book for Rs. 750. The draw for Nirmal Kerala lotteries is held on Friday.

Karunya Kerala state lotteries carry the first prize of Rs. 80 lakhs, the second prize of Rs. 10 Lakhs, the third prize of Rs. 1 Lakh, and a consolation prize of Rs. 8000. Participants can buy a single ticket for Rs. 40 and a full book for Rs. 1000. The draw for Kerala state lotteries Karunya is held on Saturday.

Besides the prizes mentioned above, there are other prizes ranging from Rs. 100 to Rs. 5000, for the above lotteries.

The state department also hosts festive Bumper lotteries like Xmas (for christmas), Vishu, Thiruvonam (for Onam) and Pooja (for Dussehra), and seasonal jackpots like Summer and Monsoon lotteries.

In the year 2017, a Kerala driver won the Onam bumper lottery of Rs. 10 Crores.

All the above kerala lotteries combined make for the biggest cash flow in the state.

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Kerala State Lottery Results

The live kerala state lottery result is announced at 3 PM every day at Sree Chithira Home Auditorium, Thiruvananthapuram.

To check the lottery results online, one can visit, 4 pm onwards. The results are also published in Kerala Government Gazette.

For prize money less than Rs. 5000, one can claim the money from any lottery shop in the state after verifying the Kerala lottery numbers from the Gazette. For any amount above Rs. 5000, winners need to submit the winning lottery ticket at a bank or government lottery office with an ID proof, within 30 days of the draw. Read about the documents required to claim a prize.

To check the Kerala state lottery results today, participants can visit the Kerala State lottery website after 4 pm.

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How much tax will you pay on winning a Kerala State lottery

If you win a Kerala state lottery, the prize money will be taxable under the head ‘Income from other Sources’.

When your winning is above Rs. 10,000, TDS of 30% will be automatically deducted from your earning under Section 194B of the Income Tax Act, 1961 and you will receive the balance, as per section 194B. The prize distributors are responsible to deduct this tax amount before giving any prize money to the winners.

One may note that no deduction under Sections  80C or 80D is allowed from this income.

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January 14, 2019 – No decision taken on GST rate reduction on lotteries; matter referred to GoM

January 3, 2019 – GST council to decide on lowering tax rate for lotteries on 10th January

June 25, 2017 – Kerala FM hails GST rate on lottery tickets, private operators federation expresses unhappiness