Amid social media debate over Finance Minister Nirmala Sitharaman’s tackle three completely different tax slabs for popcorn below Items and Providers Tax (GST), Congress on Sunday mentioned the “absurdity” of it solely brings to gentle the rising complexity of the system and requested whether or not the Modi authorities will present the braveness to launch a whole revamp for instituting a GST 2.0.
Finance Minister Nirmala Sitharaman speaks on the fifty fifth assembly of the GST Council, in Jaisalmer on Saturday. (ANI)
GST Council on Saturday agreed to concern a clarification on taxation of popcorn, saying that pre-packed and labelled ready-to-eat snacks will entice a 12 per cent tax whereas an 18 per cent GST might be levied whether it is caramelised.
A video of Finance Minister Nirmala Sitharaman’s briefing over the fifty fifth assembly of the GST Council that occurred on December 21 has been going viral. Within the video, Sitharaman clarified that able to eat popcorn which is blended with salt and spices are classifiable below ‘namkeens’ attracts 5 per cent GST if equipped as aside from pre-packaged and labelled and 12 per cent GST if equipped as pre-packaged and labelled.
“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 per cent GST,” Sitharaman mentioned within the press briefing.
“When you talk outside it looks silly… but during discussions with states in Fitment Committee on on every item, it is clearly mentioned that things with added sugar are treated differently… be it drinks, carbonated drinks, juice… whatever has added sugar. This is why, till the time popcorn is salted, it attracts five per cent GST. But when it has added caramelised sugar, it is no longer namkeen, hence, it’s rate is different,” Sitharaman added.
Congress slams govt
Congress basic secretary in-charge communications Jairam Ramesh on Sunday claimed GST evasion is important, enter tax credit score fraud is frequent, and the variety of bogus corporations set as much as “game” the GST system runs into 1000’s.
“The absurdity of three different tax slabs for popcorn under GST, which has unleashed a tsunami of memes on social media, only brings to light a deeper issue: the growing complexity of a system that was supposed to be a Good and Simple Tax,” he mentioned in a publish on X.
“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.
“Monitoring of provide chains is weak, the registration course of is flawed, benefits are being taken of loopholes in turnover exemptions, compliance necessities are nonetheless cumbersome, and misclassification of products is frequent,” Ramesh said.
He said the recent data on tax frauds uncovered by the Directorate General of GST Intelligence (DGGI) reveal GST evasion of ₹2.01 lakh crore in FY24.
“With the Union Price range now simply 40 days away, will the PM and FM summon the braveness to launch a whole overhaul and institute a GST 2.0?” Ramesh requested.