GST Council's popcorn taxation sparks backlash on social media

NEW DELHI: The GST Council's proposal to levy different tax rates on popcorn based on whether it contains sugar or salt has faced extensive backlash on social media, with two former government economic advisers criticising the taxation framework established in 2017.

The GST Council, led by the finance minister Nirmala Sitharaman, on Saturday proposed 5% GST for non-branded popcorn with salt and spices, 12% for pre-packaged and branded varieties, and 18% for caramel popcorn, classified under sugar confectionery.

The Union finance minister defended the 18% tax on caramel popcorn, stating that items containing added sugar attracts different taxation.

Later, the GST Council issued a clarification, saying that pre-packed and labelled ready-to-eat snacks will attract a 12 per cent tax while an 18 per cent GST will be levied if it is caramelised. There is no change in the tax rate of popcorn and the GST Council has only agreed that the Central Board of Indirect Taxes and Customs (CBIC) will issue a circular clarifying the current taxation regime of popcorn.

However, opposition politicians, economists and government supporters expressed their disapproval while others responded with humour and satire.

"Complexity is a bureaucrat's delight and citizens' nightmare," said former Chief Economic Adviser K V Subramanian on X, questioning the decision's value given its minimal revenue impact and public inconvenience.


Additionally, his predecessor Arvind Subramanian, criticised the move for increasing complexity rather than simplifying the system, mentioning issues with enforcement and rationality.

Meanwhile, Congress party leader and spokesman Jairam Ramesh criticised the "absurdity of three different tax slabs for popcorn under GST", saying how it exemplifies the increasing complexity of what was intended to be a straightforward tax system.

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