• The Goods and Services Tax (GST) Council’s decision to impose varying tax rates on different types of popcorn has sparked widespread criticism and debate.
• Non-branded popcorn with salt and spices will now attract a 5 per cent GST, while pre-packaged and branded popcorn will face a 12 per cent GST. Caramel popcorn, classified as a sugar confectionery, has been placed under the 18 per cent GST slab.
Objectives behind the move:
• These changes aim to standardise taxation across states, where discrepancies previously existed.
• The rationale behind taxing caramel popcorn at the highest rate was clarified by Finance Minister Nirmala Sitharaman, who cited the addition of sugar as a factor for its higher GST classification. However, this move has triggered a wave of social media reactions and political backlash.
Criticism and challenges
• Critics, including opposition leaders and former government economic advisers, have expressed concerns about the increasing complexity of the GST framework.
• Former economic adviser Arvind Subramanian highlighted that the move complicates enforcement and undermines the intended simplicity of the GST system.
• This is not the first time GST classifications have drawn public ire. Past controversies have included discrepancies in taxing chapatis versus layered flatbreads and distinctions between curd, yogurt, and other dairy products. While the GST framework has brought significant improvements in tax compliance, these debates highlight the need for further simplification and reform.
(The author is a trainer for Civil Services aspirants.)