NEW DELHI – India’s move to impose different taxes on popcorn depending on sugar or spice content has been criticized by the opposition and sparked outrage on social media, with two former government economic advisers criticizing the tax system introduced in 2017. Questions have been raised.
The Goods and Services Tax (GST) Council, chaired by the Finance Minister and comprising state representatives, on Saturday announced that unbranded popcorn mixed with salt and spices will attract 5% GST, pre-packaged and branded popcorn will attract 12% GST. . Caramel popcorn, classified as sugar confectionery, 18%.
The different rates came into effect immediately, eliminating confusion over rates as popcorn was taxed differently across states.
Explaining the rationale behind the decision to impose 18% tax on caramel popcorn, Finance Minister Nirmala Sitharaman said that any product with added sugar is taxed separately.
However, the announcement took social media by storm on Sunday, with opposition politicians, economists and supporters of Prime Minister Narendra Modi’s government criticizing the move and others creating memes and poking fun at it.
“Complexity is a joy for bureaucrats and a nightmare for citizens,” KV Subramaniam, India’s former chief economic adviser, wrote on X. He questioned the propriety of the decision, saying it would contribute minimally to tax revenue but cause inconvenience to citizens.
His predecessor, Arvind Subramanian, said, “The stupidity has increased because instead of moving at least towards simplicity, we are moving towards more complexity, difficulty of enforcement and just irrationality”.
A post widely circulated on Twitter showed an image of a branded “Salt Caramel” popcorn packet and stated how it would confuse the tax official in calculating the tax rate on it.
Jairam Ramesh, leader and spokesperson of the main opposition Congress party, said, “The absurdity of three different tax slabs for popcorn under GST… only brings to light a deeper issue that is the increasing complexity of a system that It was considered good.” And make it simple”.
Spokespeople for the Finance Ministry, the GST Council Secretariat and the ruling Bharatiya Janata Party did not respond to requests for comment on the controversy.
The GST system has been in similar controversies in the past for its tax classification and has faced questions, although not on this scale.
Past controversies include taxing chapatti or unleavened Indian flatbread differently from flaky flatbread, different rates for curd and yogurt, and taxing cream buns versus buns and cream separately.
(Reporting by Nikunj Ohri; Editing by YP Rajesh (Reuters))
