Kerala to protect state lottery from GST

The government of Kerala is considering a new law that would negate the impact of the Goods & Services Tax (GST) on lotteries, local media reports.

According to the state government, the Kerala Tax on Paper Lotteries Act of 2005 will be inoperative should the new GST be implemented,

The Act, which was enacted in 2005, is important as it allows the state to control the printing and sales of lotteries.

The Act also allows the government to place a Rs 1 million (US$15,500) tax on every bumper draw of paper lotteries and Rs 250,000 in respect of any other draw, to be paid by each promoter.

"State lotteries are mostly associated to social causes, such as the Karunya Lottery in which the profit is used for medical services to the poor and cancer patients," said V S Mani, president of the Kerala State Lottery Agents and Sellers Union, quoted by Business Standard.

"This took away the profit and price motive from the process. While price is a factor, people buy tickets to help someone. Once lotteries from other states return, it would again go back to the levels of gambling, affecting the lives of many. This would again result in public ire against lotteries. This will also affect the agents and sellers,” he added.

Finance Minister T M Thomas Isaac however made assurances that the state is looking at possibilities to bring in a new Act to protect the state lottery.

"With implementation of GST, the tax laws on paper lotteries will become inoperative. This is a serious issue. We have to explore the possibility of new legislation within the legislative jurisdiction of the state assembly. The government is seriously considering to enact a new law for imposing a licence fee on the draws of paper lotteries. Considering the urgent requirement for such a law, the government has decided to present a new Bill for the purpose," he said.

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