On December 22, 2024, the Congress party sharply criticized the Narendra Modi government over the “absurdity” of having three different tax slabs for popcorn under the Goods and Services Tax (GST) system. The party demanded a comprehensive overhaul of the GST regime, citing the complexity of the system and its role in enabling tax evasion.
In a detailed post on X, Congress General Secretary (Communications) Jairam Ramesh highlighted the absurdity of multiple tax rates on popcorn, which has sparked widespread memes on social media. He pointed out that these discrepancies revealed a much deeper issue—the growing complexity of a system that was originally meant to be a “Good and Simple Tax.”
Ramesh stressed that the complexities in the current GST system were facilitating widespread tax evasion. He cited common occurrences of input tax credit fraud, the rise of bogus companies exploiting GST loopholes, and weak tracking of supply chains. Additionally, flaws in the registration process and frequent misclassification of goods were contributing to the problem.
Ramesh also pointed to the Directorate General of GST Intelligence (DGGI)’s recent data, which revealed that GST evasion amounted to ₹2.01 lakh crore in the fiscal year 2024.
With the Union Budget only 40 days away, Ramesh called on Prime Minister Narendra Modi and Finance Minister Nirmala Sitharaman to demonstrate the courage to implement a GST 2.0, overhauling the current system to address its flaws.
The GST Council had earlier agreed to issue a clarification on the taxation of popcorn, after confusion arose over the different tax rates. Under the current regime, pre-packed and labelled ready-to-eat snacks, including popcorn, are subject to a 12% GST. However, caramelized popcorn, which is mixed with sugar, is taxed at 18% due to its classification as a sugar confectionery. Additionally, plain popcorn mixed with salt and spices, which retains the character of namkeen, is taxed at 5% if it is not pre-packaged and labelled.
The GST Council clarified that there would be no change in these rates, but the Central Board of Indirect Taxes and Customs (CBIC) would issue a circular to provide further clarification on the taxation of popcorn.
