Congress slams government on ‘Caramel Popcorn GST’ social media debate; calls it ‘absurd’
Congress slams government on ‘Caramel Popcorn GST’ social media debate; calls it ‘absurd’
Recently, there has been significant discussion on social media regarding Finance Minister Nirmala Sitharaman’s remarks about the varying tax rates for popcorn under the Goods and Services Tax (GST). The Congress party has labeled this situation as “absurd,” emphasizing the increasing complexity of the tax system and questioning whether the Modi government is willing to initiate a comprehensive reform to establish a GST 2.0.
The absurdity of three different tax slabs for popcorn under GST, which has unleashed a tsunami of memes on social media, only brings to light a deeper issue: the growing complexity of a system that was supposed to be a Good and Simple Tax.
— Jairam Ramesh (@Jairam_Ramesh) December 22, 2024
GST evasion is significant, input tax…
During the GST Council meeting on December 21, it was clarified that pre-packed and labeled ready-to-eat popcorn would be subject to a 12 percent tax, while caramelized popcorn would attract an 18 percent GST. A video of Sitharaman’s briefing has gone viral, where she explained that ready-to-eat popcorn mixed with salt and spices is categorized as ‘namkeens,’ incurring a 5 percent GST if sold unpackaged and a 12 percent tax if pre-packaged. In contrast, popcorn mixed with sugar, which changes its classification to sugar confectionery, would be taxed at 18 percent.
“When you discuss it in public, it may seem ridiculous, but in the Fitment Committee meetings with the states, it’s clearly stated that items with added sugar are categorized differently. This applies to drinks, carbonated beverages, juices, and anything that contains added sugar. Therefore, as long as popcorn is salted, it is subject to a five percent GST. However, once it has caramelized sugar added, it changes from being a savory snack, and thus, its tax rate is different,” Sitharaman explained.
Congress Criticizes the Government
On Sunday, Congress general secretary in-charge of communications, Jairam Ramesh, criticized the government over the complexities surrounding the Goods and Services Tax (GST). He pointed out that the existence of three different tax slabs for popcorn has sparked a wave of memes on social media, but it also highlights a more serious issue: the increasing complexity of a system that was intended to be a “Good and Simple Tax.”
Ramesh emphasized that GST evasion is a significant problem, with input tax credit fraud being common and thousands of bogus companies established to exploit the GST framework. He noted that the tracking of supply chains is inadequate, the registration process has flaws, and loopholes in turnover exemptions are being exploited, leading to cumbersome compliance requirements and frequent misclassification of goods.
He also referenced recent data from the Directorate General of GST Intelligence (DGGI), which revealed a staggering GST evasion of ₹2.01 lakh crore in the fiscal year 2024. With the Union Budget approaching in just 40 days, Ramesh questioned whether Prime Minister Modi and Finance Minister Sitharaman would have the courage to initiate a complete overhaul and implement a GST 2.0.
