NEW DELHI – India’s transfer to tax popcorn otherwise primarily based on its sugar or spice content material has drawn criticism from the opposition and sparked social media outrage, with two former authorities financial advisers questioning the tax system launched in 2017.
The Items and Providers Tax (GST) Council, chaired by the finance minister and together with state representatives, introduced on Saturday that non-branded popcorn blended with salt and spices would appeal to a 5% GST, pre-packaged and branded popcorn 12%, and caramel popcorn, categorised as a sugar confectionery, 18%.
The differential charges got here into impact instantly, ending confusion over charges as popcorn was taxed otherwise throughout states.
Explaining the rationale behind the choice to tax caramel popcorn at 18%, Finance Minister Nirmala Sitharaman stated that any product with added sugar is taxed otherwise.
The announcement, nonetheless, sparked a social media storm on Sunday, with opposition politicians, economists and supporters of Prime Minister Narendra Modi’s authorities criticising the transfer and others creating memes and poking enjoyable at it.
“Complexity is a bureaucrat’s delight and residents’ nightmare,” India’s earlier Chief Financial Adviser Okay V Subramanian wrote on X. He questioned the rationale of the choice he stated will contribute minimally to tax revenues, however inconvenience residents.
His predecessor, Arvind Subramanian, stated “the folly is compounded as a result of as a substitute of a minimum of shifting within the path of simplicity we’re veering to better complexity, issue of enforcement and simply irrationality”.
One broadly circulated put up on X confirmed a picture of a branded “salt caramel” popcorn packet and stated how it will ship the taxman right into a tizzy calculating the tax charge on it.
Jairam Ramesh, chief and spokesman of the primary opposition Congress celebration, stated the “absurdity of three completely different tax slabs for popcorn underneath GST … solely brings to mild a deeper concern that the rising complexity of a system that was alleged to be a Good and Easy Tax”.
A finance ministry spokesperson, the GST Council Secretariat and a spokesman for the ruling Bharatiya Janata Get together didn’t reply to requests for touch upon the controversy.
The GST system has run into comparable controversies for its tax classifications up to now and confronted questions though not on this scale.
Earlier controversies have concerned taxing chapatis or unleavened Indian flatbread otherwise from layered flatbreads, completely different charges for curd and yogurt, and cream bun versus bun and cream served individually.
(Reporting by Nikunj Ohri; Modifying by YP Rajesh (Reuters))
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