Reportedly 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 in-charge communications 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.
Perhaps he said "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". "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. Ramesh said "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".
Moreover 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. There is no change in the tax rate of popcorn and the GST Council has only agreed that the Central Board of Indirect Taxes and Customs (CBIC) will issue a circular clarifying the current taxation regime of popcorn. However, when popcorn is mixed with sugar (caramel popcorn), its essential character changes to that of a sugar confectionary, and would therefore be classifiable under HS 1704 90 90 and attract an 18 per cent GST, as per the clarification.
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