GST: Luck down for lotteries in the state
By M S Vidyanandan | Express News Service | Published: 24th November 2017 01:39 AM |
Last Updated: 24th November 2017 11:57 AM | A+A A- |
THIRUVANANTHAPURAM: GST implementation, coupled with the revision of the price structure, has resulted in a dip in the profit of the State Lotteries Department. There will be an estimated 6-8 percent decrease in the total profit of the department this fiscal.
Both the GST and price revision came into effect in July this year. The price structure was upped from the 40-44 percent of the sales turnover to 50-51 percent.
Under the earlier tax regime, the Lotteries Department had to pay R50 lakh as tax for each draw. The tax rate for lotteries under GST is 12 percent which means the department has to pay R3.20 as tax for a ticket priced at R30.
The department rolls out seven weekly lotteries, all priced at Rs 30 per ticket. Bumper lotteries at higher prices are sold for X’Mas-New Year, Summer, Vishu, Monsoon, Thiruvonam and Navaratri (Pooja bumper).
Before July, the department’s profit was about 23 percent of the total sales turnover. After the GST and price revision, this has come down to 15-16 percent.
In July, the department had slashed the prices of some weekly lotteries and standardised the ticket rates. Now, all weekly lotteries are priced at R30 per ticket. However, the decrease in the ticket price will not have a significant impact on the revenue as the number of tickets has been increased.
For eg, before July, the total number of Karunya lottery tickets (each priced at R50) sold was in the 40-45 lakh range. After the ticket price was brought down to R30, the total number of tickets sold is about 91.2 lakh.
The department has set a target of R10,000 crore turnover this fiscal. It could achieve only about R5,600 crore by November third week.
The lottery crisis
Under GST the tax rate is 12 percent, hence the department has to pay D3.20 as tax for a ticket priced at D30
The department also revised and standardised the prices of the tickets
After GST and price revision, the profit of the Lotteries Department has come down to 15-16 percent from 23 percent of the total turnover
The target set for this fiscal was D10,000 crore but only D5,600 crore was achieved by third week of November
