Former Chief Economic Advisor (CEA) Krishnamurthy Subramanian on Monday raised concerns over the rationale behind the GST Council’s decision to impose varying GST rates on different types of popcorn, questioning its negligible revenue impact and potential inconvenience to citizens.
The council on Saturday recommended 5% GST on salted popcorn, 12% on pre-packaged and labeled popcorn, and 18% on caramelised popcorn.
Subramanian highlighted the minimal contribution such a decision would make to government revenues, calculating that estimated popcorn sales in 2025, projected at Rs 1,700 crore by GlobalData, would generate Rs 300 crore in GST revenue if taxed at 18%. This figure represents only 0.013% of the total GST collection estimated for 2025, pegged at Rs 22 lakh crore.
“What is the rationale for a decision that can max contribute 0.013% to revenue but inconvenience citizens?” Subramanian asked, urging policymakers to define objectives and examine the quantitative impact before making decisions.
The council’s move has drawn widespread criticism from industry experts, economists, and analysts, with Finance Minister Nirmala Sitharaman facing backlash.
Former Infosys CFO Mohandas Pai called the rates “silly and complex,” warning they could lead to “tax terrorism.” In a tweet tagging Prime Minister Narendra Modi and Sitharaman, Pai said, “Citizens are becoming victims of bad policy which will make them hostages to rent-seeking officials and create disputes. GST needs to be simplified, not this.”
Subramanian also criticised the bureaucratic tendency toward complexity, saying, “Complexity is a bureaucrat’s delight and citizens’ nightmare.”
Former CFO Arvind Subramanian echoed the sentiments, calling the decision a “national tragedy.” He tweeted, “This is a national tragedy, violating the spirit of the Good & Simple Tax the GST was meant to be. The folly is compounded because instead of at least moving in the direction of simplicity we are veering to greater complexity, difficulty of enforcement, and just irrationality. Sad.”
Security analyst Sushant Sareen condemned what he called “brainless bureaucracy” and “clueless politicians,” accusing them of penalising consumers for product upgrades. “Apparently for these socialist geniuses unpackaged popcorn is a necessity, packaged ones are comfort food, and caramelised are luxury,” he remarked. “Next they will say flavored popcorn with cheese are sin goods and taxed at whatever ridiculous rate they decide.”
Sareen added, “The Good and Simple Tax is neither good nor simple, it is tax till you kill the golden goose model. Even basic common sense on economics escapes these people because socialistic pretensions outweigh everything else.”
The finance ministry, however, clarified that the GST Council’s recommendation was not a new tax imposition but a clarification aimed at resolving disputes arising from varied interpretations of existing tax rates. “It is a clarification being recommended by the GST Council to settle the disputes arising out of interpretation,” the ministry stated.
