Popcorn Taxation: A Complex Conundrum Under GST
In a surprising twist to the ongoing GST debate, Congress leader Jairam Ramesh has criticized the GST Council’s recent clarification on the taxation of popcorn, labeling it as absurd. This outcry follows Finance Minister Nirmala Sitharaman’s explanation regarding the three different GST tax slabs for popcorn, which has gone viral and sparked a wave of memes across social media.
Growing Complexity of GST
Jairam Ramesh took to X to express his concerns, stating, “The absurdity of three different tax slabs for popcorn only highlights the growing complexity of a system that was supposed to be a Good and Simple Tax.” As the Union Budget approaches in just 40 days, Ramesh urges Prime Minister Narendra Modi’s government to consider a complete overhaul and introduce a GST 2.0.
Concerns Over GST Evasion
Ramesh raised alarming points about GST evasion, claiming that significant fraud is prevalent, with thousands of bogus companies exploiting the system. He stated, “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.” Recent data from the Directorate General of GST Intelligence revealed a staggering ₹2.01 lakh crore in GST evasion for FY24, further emphasizing the need for reform.
The Popcorn Tax Breakdown
The GST Council’s clarification specifies that pre-packed and labeled ready-to-eat popcorn is subject to a 12% tax, while caramel popcorn attracts an 18% GST due to its classification as a sugar confectionery. In contrast, unlabelled salted popcorn currently incurs a 5% GST. Sitharaman mentioned that the treatment of popcorn varies based on its ingredients, leading to this complex tax structure.
Conclusion
The popcorn taxation saga has not only illuminated the absurdities within the GST framework but has also reignited discussions on the necessity for a simpler and more transparent tax system in India. To stay updated on financial insights and deals, visit Looffers.com for the latest offers and promotions.
