New Delhi: Considerable social media attention, including a post by the opposition Congress party on how popcorn comes under three different tax slabs, has renewed focus on the current Goods and Services Tax system.
Congress general secretary of communications Jairam Ramesh wrote in a post that the “tsunami of memes on social media” only brings to light the growing complexity of a system that was supposed to be a “Good and Simple Tax.”
Ramesh highlighted that that the system allows for evasion, fraud and other advantages to be taken of it.
“GST evasion is significant, input tax credit fraud is common, and the number of bogus companies set up to ‘game’ the GST system runs into thousands. Tracking of supply chains is weak, the registration process is flawed, advantages are being taken of loopholes in turnover exemptions, compliance requirements are still cumbersome, and misclassification of goods is frequent,” Ramesh wrote.
Recent data on tax frauds, Ramesh said, “uncovered by the Directorate General of GST Intelligence (DGGI), reveal GST evasion of Rs 2.01 lakh crore in FY24,”
“With the Union Budget now just 40 days away, will the PM and FM summon the courage to launch a complete overhaul and institute a GST 2.0?” he asked.
From namkeen to sugar confectionary
On December 21, the GST Council issued a clarification on taxation of popcorn, saying that pre-packed and labelled ready-to-eat snacks will attract a 12% tax while an 18% GST will be levied if it is caramelised.
This is because in the latter, its character changes from that of ‘namkeens’ to ‘sugar confectionary’, Union finance minister Nirmala Sitharaman said at the briefing.
“When you talk outside it looks silly… but during discussions with states in Fitment Committee on on every item, it is clearly mentioned that things with added sugar are treated differently… be it drinks, carbonated drinks, juice… whatever has added sugar. This is why, till the time popcorn is salted, it attracts 5% GST. But when it has added caramelised sugar, it is no longer namkeen, hence, it’s rate is different,” Sitharaman said.
This means that popcorn which is not pre-packaged and labelled is to be charged at 5% GST, popcorn which is pre-packaged and labelled attracts 12% GST and popcorn which is caramelised is at 18%
The internet had a field day. “Watching India’s Finance Minister explain the GST rate on different types of popcorn (salted, caramel), itself deserves to be enjoyed with popcorn 🍿,” wrote a commentator.
“If you’re broke but still craving caramel popcorn, just grab some salted popcorn and pop 4 Alpenliebe toffees in your mouth. Follow this account for more GST-friendly hacks,” wrote another.
“Asked phuchkawalla to give a few with meetha pani yesterday and he charged me extra cause 18% GST on sweet dishes,” joked an account on X.
“Man arrested at movie theatre for smuggling sugar inside for his popcorn 🤷🏻,” yet another social media participant said.
“Those who are not capable of implementing one tax on popcorn are claiming to implement One Nation One Election,” said another.
Many took a slightly more serious angle – that the differentiation between kinds of popcorn comes amidst the Council not removing GST on term and medical insurance, despite longstanding demand.
“Dear @nsitharaman ji, How does it matter whether GST on ₹100 popcorn is 5% or 12% or 18%? Here Senior Citizens are paying 18% GST on Health Insurance worth ₹80000. Sad to say this. @GST_Council really needs to get priorities right,” a social media participant wrote.
