The state of India has imposed the taxes that seem to be hurting the lottery industry in that country. Distributor of lotteries, the Sugal and Damani group report that lottery distributors are appealing to the government to reduce the current Goods and Services Tax (GST). The tax amounts 28% on the face value of all sold lottery tickets by private lotteries and 12% for state government lotteries.
Industry analysts report that business revenue fell by 70% since these taxes were imposed. Distributors appeal to the government to reduce GST because not only it harms the business, it may also result in unemployment and massive release of workers.
Another thing is, in India, the lottery winner is required to pay 40% tax, which really discourages the customers to participate. Before this new tax, the lottery winner would keep 90% of the money won. Now, the winner gets to keep less than 60% of the prize money.
Kamlesh Vijay, the CEO of Sugal and Damani Group is concerned with the current state of things and is constantly appealing to the government to change this. He believes that a 20% tax imposed on a lottery winner is more than enough to keep both sides happy.
“Currently, 12 percent 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 percent 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, etc when their tickets are sold in other bigger states like West Bengal or Kerala.”
Although the number of people displeased by this tax is enormous, it looks like that government simply won’t budge. They believe that this tax is adequate for the industry and the customers. It only remains to be seen what lies in store for Indian lotteries and their customers in the near future.