New Delhi: India's decision to implement varying tax rates on popcorn depending on its sugar or spice content has faced backlash from the opposition and sparked outrage on social media. Two former government economic advisers have raised concerns about the new tax system, which was introduced in 2017.
On Saturday, the Goods and Services Tax (GST) Council, headed by the finance minister and comprising state representatives, announced that non-branded popcorn with salt and spices would incur a 5% GST, pre-packaged branded popcorn would be taxed at 12%, and caramel popcorn, classified as a sugar confectionery, would attract an 18% tax.
The new rates aim to resolve confusion over the tax applied to popcorn in different states. Finance Minister Nirmala Sitharaman explained that products with added sugar, such as caramel popcorn, are taxed at a higher rate.
However, the announcement triggered a social media uproar, with opposition leaders, economists, and even supporters of Prime Minister Narendra Modi's government criticizing the move. Many shared memes mocking the situation.
K V Subramanian, India's former Chief Economic Adviser, expressed concerns on X (formerly Twitter), saying, "Complexity is a bureaucrat’s delight and citizens’ nightmare." He questioned the logic behind a decision that he felt would add minimal revenue but cause inconvenience to citizens.
Arvind Subramanian, his predecessor, also criticized the tax changes, saying they introduced unnecessary complexity instead of moving toward simplification. He described the approach as "irrational" and likely to complicate enforcement.
One viral post on X humorously illustrated the tax confusion by showing a branded "salt caramel" popcorn packet, highlighting the challenge of determining which tax rate would apply.
Jairam Ramesh, a prominent leader of the opposition Congress party, called the multiple tax slabs for popcorn "absurd" and pointed out that this reflected a broader issue of growing complexity in the GST system, which was originally intended to be "Good and Simple."
Despite the controversy, there was no immediate response from the finance ministry, the GST Council Secretariat, or the ruling Bharatiya Janata Party. The GST system has faced similar challenges in the past, with debates over classifications like the taxation of chapatis versus layered flatbreads, curd versus yogurt, and cream buns versus buns with cream.