How to tax popcorn? GST council’s formula sparks outrage
The Hindu
India's controversial popcorn tax system sparks outrage and criticism, with opposition questioning the complex GST rates.
India's move to tax popcorn differently based on its sugar or spice content has drawn criticism from the opposition and sparked social media outrage, with two former government economic advisers questioning the tax system introduced in 2017.
The Goods and Services Tax (GST) Council, chaired by the finance minister and including state representatives, announced on Saturday that non-branded popcorn mixed with salt and spices would attract a 5% GST, pre-packaged and branded popcorn 12%, and caramel popcorn, categorised as a sugar confectionery, 18%.
The differential rates come into effect immediately, ending confusion over rates as popcorn was taxed differently across states.
Explaining the rationale behind the decision to tax caramel popcorn at 18%, Finance Minister Nirmala Sitharaman said that any product with added sugar is taxed differently.
The announcement, however, sparked a social media storm on Sunday, with opposition politicians, economists and supporters of Prime Minister Narendra Modi's government criticising the move and others creating memes and poking fun at it.
"Complexity is a bureaucrat’s delight and citizens’ nightmare," India's previous Chief Economic Adviser K V Subramanian wrote on X. He questioned the rationale of the decision he said will contribute minimally to tax revenues, but inconvenience citizens.
His predecessor, Arvind Subramanian, said "the folly is compounded because instead of at least moving in the direction of simplicity we are veering to greater complexity, difficulty of enforcement and just irrationality".
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