New Delhi/ Thiruvananthapuram: The Goods and Services Tax (GST) Council has fixed a uniform tax rate of 28 per cent on both state-run and private lotteries, dealing a severe blow to Kerala.
Kerala is the only state with a government-run lottery.
Currently, the GST rate for lottery run by the state government is at 12 per cent. This would become 28 per cent from next March. Kerala Finance Minister Thomas Isaac said that though the state would incur losses, the ticket rates would not be jacked up.
Instead the commission for lottery, prize money, profit etc would be revised after holding discussions with the workers' unions, the minister added. The number of lotteries might also see an increase.
The government currently makes a profit of Rs 1,200 crore from the lottery. However, with the 16-per cent hike in tax, the Centre would get more than half of the profit. Notably, the tax for private lottery has not been reduced.
The provisions of the GST law would be strictly implemented. Private lotteries too would have to file correct data. The Centre has issued notification on the norms. The permission has been denied for the Nagaland lottery.
The Centre had earlier given an assurance that the norms of the lottery law would be strictly implemented when the tax rates would be made uniform. The finance minister said that the state would pressurise the Centre for this in the coming days.
GST council's first voting
This is for the first time that the GST council has voted on any issue. Kerala, Chhattisgarh, Madhya Pradesh, West Bengal, Delhi and Puducherry had opposed the move to bring in the uniform tax rate.
Seventeen states and Centre (25 per cent vote value) voted in favour of bringing in the uniform tax rate. Punjab and Rajasthan stayed away from voting.
As per the GST law, a proposal can be passed only with 75 per cent of the votes. If Rajasthan and Punjab were to stand with Kerala, the law could not have been passed, minister Isaac said. While pointing out that officials of Jammu and Kashmir, and Odisha voted at the council, the Kerala minister said that this could have been questioned. However, since two states stayed away from voting, any such questioning became irrelevant.
Loss for the government
With the uniform rate fixed for lottery, the Kerala government is left with only two options. Either increase the ticket rate by adding the GST rates or bear the loss of revenue.
Though increasing ticket rates would prove beneficial to the government, Thomas Isaac said that the rates would not be increased.
If the tickets are sold at the current rates, the government would suffer huge losses.
The lottery brings in a turnover of Rs 11,300 crore and gives a profit of Rs 1,300 crore to the government in a year.
The GST share of a Rs 30 lottery ticket will be revised as follows:
Base price: Rs 23.43 ( Rs 26.80)
GST: Rs 6.56 (Rs 3.21)
GST%: 28 per cent (12 per cent)
Ticket rate: Rs 30 (Rs 30)
The previous rates are given within brackets.
