Kerala gov't considers new law to protect lottery revenue

With GST implementation, the Kerala Tax on Paper Lotteries Act of 2005 will be inoperative, says the state government.

"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," said Thomas Isaac, finance minister.

Kerala has been allowing lottery sales for long. However, a large number of lotteries operating through agents in the state presented allegations of lack of transparency and complaints of non-payment of the price money, which resulted in public protest and several cases in court. 

"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," says V S Mani, president of the Kerala State Lottery Agents and Sellers Union (affiliated to the pro-Marxist Centre for Indian Unions). "This took away the profit and price motive from the process. While price is a factor, people buy tickets to help someone."

Adding: "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."

Various trade unions in the sector have come together to form a forum to ask the Centre to allow state governments to control the segment, and to exempt service tax on government lotteries within GST.