Congress slams government over 'caramel popcorn GST' debate
The Congress party has slammed the government over the GST imposed on popcorn. This comes after Finance Minister Nirmala Sitharaman clarified the tax slabs during the 55th GST Council meeting. She said pre-packed and labeled ready-to-eat popcorn attracts a 12% GST, while caramelized popcorn is taxed at 18%. Unpacked and unlabeled salted popcorn is taxed at 5%.
Congress calls for overhaul of GST system
Congress general secretary Jairam Ramesh called the tax slabs "absurd" and pointed out flaws in the GST system. He alleged that GST evasion is rampant, with input tax credit fraud being rampant. Ramesh also said that thousands of fake companies take advantage of the GST system. He called for a complete overhaul of the GST system, proposing a GST 2.0. The Directorate General of GST Intelligence flagged ₹2.01 lakh crore in tax evasion for FY24.
Sitharaman explains rationale behind popcorn GST slabs
Sitharaman explained that ready-to-eat popcorn mixed with salt and spices are classified under 'namkeens' and attract 5% GST if supplied other than pre-packaged and labeled, but 12% GST if supplied as pre-packaged and labeled. "However, when popcorn is mixed with sugar thereby changing its character to sugar confectionary (Ex: caramel popcorn), it would be classifiable under HS 1704 90 90 [sugar confectionary] and attract 18% GST," she said during the press briefing.
GST Council's decisions on other items
The GST Council also took decisions on other items, including slashing tax on fortified rice kernels to 5% from 18%. Used electric vehicles sold by businesses will be taxed at an 18% margin value rate. Gene therapy has been exempted from GST while black pepper and raisins supplied by farmers are also exempt. The council deferred decisions on life and health insurance premiums and food delivery app taxes.
