Popcorn tax slabs anger Congress

New Delhi: The Congress on Sunday said the "absurdity" of three different tax slabs for popcorn under GST only brings to light the growing complexity of the system and asked whether the Modi government will show the courage to launch a complete overhaul for instituting a GST 2.0.

Congress general secretary Jairam Ramesh also claimed 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.

“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 said in a post 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. “Tracking of supply chains is weak, the registration process is flawed, advantages are being taken of loopholes in turnover exemptions, compliance requirements are still cumbersome, and misclassification of goods 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 Rs 2.01 lakh crore in FY24. “With the Union Budget now just 40 days away, will the PM and FM summon the courage to launch a complete overhaul and institute a GST 2.0?” Ramesh asked.

GST Council on Saturday agreed to issue a clarification on taxation of popcorn, saying that pre-packed and labelled ready-to-eat snacks will attract a 12 per cent tax while an 18 per cent GST will be levied if it is caramelised.