Row erupts after GST council’s clarification on tax rates for varieties of popcorn
The move violated ‘the spirit of the Good and Simple Tax the GST was meant to be’, said former Chief Economic Adviser Arvind Subramanian.
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The Goods and Services Tax council’s clarification on Saturday regarding the taxability of different varieties of popcorn has caused a fresh stir, with former Chief Economic Adviser Arvind Subramanian calling it a “national tragedy”.
After the council’s 55th meeting in Jaisalmer, it clarified that ready-to-eat popcorn is taxed at 5%, pre-packaged popcorn is subject to a 12% tax, and caramel popcorn attracts an 18% Goods and Services Tax.
It noted that ready-to-eat popcorn mixed with salt and spices has the essential character of a namkeen, which currently attracts a 5% tax if it is not pre-packaged and labelled. If it is supplied as pre-packaged and labelled, a 12% tax is levied.
However, when popcorn is mixed with sugar (caramel popcorn), its essential character changes to that of sugar confectionery, and it would therefore attract an 18% Goods and Services Tax.
“There is no new imposition of any tax in this regard and is merely a clarification as certain field units were demanding different tax rates on the same,” stated the council. “Therefore, it is a clarification being recommended by the GST Council to settle the disputes arising out of interpretation.”
Following this, Congress leader Jairam Ramesh said that the different rates of taxation for varieties of popcorn were “absolutely unbelievable”. He...
