Lottery Association Appeals to Government to Exempt Lottery Tickets from 28% Tax Bracket

The Lottery Bachao Mahakruti Samiti, an association representing stake-holders in the online lottery business across Maharashtra, has appealed to the Central Government to reconsider a levy of 28% GST on lottery prize money, the highest tax slab under the tax regime. Office-bearers of the association and stake-holders of the online lottery business from across the state, had gathered in large numbers at Azad Maidan on August 21, to highlight their grievances.

Members of the Maharashtra Rajya Lottery Agent Association and Lottery Bachao Mahakruti Samiti at the Azad Maidan, Mumbai protesting against the 28% GST on online lottery prize money

The levy of a 28% tax in principle has violated the basic premise of “one nation one tax” which envisages a uniform taxation structure across the country. While private lotteries have been brought under the 28% GST slab, the lotteries promoted by the state government continue to enjoy a lower GST levy of 12%, creating uneven competition for private players.

“The online lottery business generates employment for a large number of people in the state and provides sustained livelihood to economically weaker sections of the population like widows, differently abled, handicapped and uneducated people. The imposition of 28% GST levy on sale of online lottery tickets will not only threaten the source of income of several dependents but also force lottery sellers to wind up their business operations. The government needs to treat the matter with greater empathy and implement a holistic solution for the survival and growth of the online lottery business and continued sustenance of its stake-holders, “ stated Snehal Kumar Shah, Member of Maharashtra Rajya Lottery Agent Association and Coordinator of the Lottery Bachao Mahakruti Samiti .

Following the imposition of 28% GST, the sheen and appeal of the lottery business has been considerably lost as operators have been forced to reduce the prize payout amount to 70% which was previously pegged at 90-92%.

Office-bearers of the association reiterated the view that the government should take into account the fact that the prize amount won through lotteries is already taxed under the Income Tax Act, 1961. In order to ensure that the death knell of the online lottery business is not sounded and its operational bandwidth is not disturbed, the government should levy GST at rate of 12% which will net for the government a substantial tax revenue of Rs. 700-800 crore per annum.