Is GST on popcorn worth for Government?

In a move that has left many Indians scratching their heads—and their wallets—the GST Council has introduced a tiered tax system for popcorn. Non-branded popcorn with salt and spices now attracts a 5% GST, pre-packaged and branded varieties are taxed at 12%, and caramel popcorn faces a hefty 18% levy. This decision has sparked widespread criticism for its complexity and questionable necessity. Former Chief Economic Adviser K V Subramanian aptly remarked, “Complexity is a bureaucrat’s delight and citizens’ nightmare,” questioning the minimal revenue benefits versus the inconvenience caused. (Source: Reuters)

Consider the implications for various groups:

• Children: The allure of caramel popcorn now comes with an 18% tax, potentially making this simple pleasure a luxury.
• Elderly: For seniors seeking a light snack, navigating these tax distinctions adds unnecessary confusion to their lives.
• Elite Class: While the affluent may remain largely unaffected, the absurdity of such granular taxation doesn’t escape their notice, adding to the bureaucratic maze they already navigate.
• Cinema Halls: Theaters, already struggling to attract audiences post-pandemic, now face the challenge of explaining to patrons why their popcorn prices vary not just by size but by flavor complexity.
• Marriage Resorts: Event planners must now consider the tax implications of serving different popcorn varieties, lest they inadvertently inflate their clients’ budgets.

The government’s rationale hinges on the addition of sugar, categorizing caramel popcorn as a confectionery deserving of higher tax. (Source: Reuters). However, this overlooks the broader issue: the increasing convolution of a tax system that was intended to simplify and unify.

Social media has been ablaze with satire. One user quipped, “India’s tax system: turning popcorn into a luxury item one kernel at a time.” Another jested, “Even popcorn reaches 18% GST slab. Next she’ll tax air and sunlight.”  (Source: South China Morning Post)

In the grand scheme, the revenue generated from this popcorn taxation is likely negligible. Yet, the message it sends is one of overreach and unnecessary complexity. As former Chief Economic Adviser Arvind Subramanian noted, instead of moving toward simplicity, this decision veers toward “greater complexity, difficulty of enforcement and just irrationality.” (Source: Reuters)

In conclusion, while the government’s coffers may see a marginal increase, the cost is a further erosion of public trust and the perception of a tax system increasingly disconnected from the everyday realities of its citizens. God bless us all!