The Lens: India’s popcorn tax sparks public outrage as people complain about regulation

The Goods and Services Tax (GST) Council hopes to increase India’s tax revenue and compensate for the high tax evasion plaguing the nation. However, implementing a nuanced and complex three-tiered GST on popcorn is a step in the wrong direction.

In India, non-branded popcorn will now hold a 5 per cent GST, branded popcorn with spices will be taxed 12 per cent GST as a ready-to-eat snack, and finally, caramelised popcorn will have an even higher GST of 18 per cent.

Implementing a “popcorn tax” has sparked public outrage, and rightly so. This regulation highlights how the GST has become preoccupied with unimportant regulation because it further overcomplicates this system.

The many arbitrary levels of categorisation within the GST system mean that companies and consumers both take a hit as the system makes it much harder to make even everyday payments and purchases.

The GST, first implemented in 2017, was initially considered a revolutionisation of the Indian tax system. It was the most extensive tax reform since India’s independence in 1947 because it unified all indirect taxes under one system. This simplification of India’s indirect tax was meant to save businesses from filing many taxes for each product. Yet, if the GST Council continues to complicate the GST, it destroys that very purpose.

Taxpayer acceptance will drop, meaning increased amounts of evasion as people try to avoid this complex tax system. The GST Council will hit a rut as it goes down a rabbit hole of making meaningless, arbitrary categorisations instead of focusing on improving the system.

To address these issues, the Indian government must reform the GST only to contain two broad categories of luxury and non-luxury items. This reformation would simplify the system for businesses and consumers, increasing people’s willingness to abide by the GST.

Read up on the issue in last week’s The Lens

US President Joe Biden’s administration is considering proposing a rule to cut China out of the drone supply chain.

The US Department of Commerce’s Bureau of Industry and Security (BIS) said it was soliciting public opinion by March 4 on a rule regarding risks associated with China and Russia over the information and communication technology and services (ICTS) integral in the supply chain for unmanned aircraft systems (UAS), or drones.

The move came hours after Beijing announced export bans on 28 American companies, including leading manufacturers of defence systems to an export control list to “safeguard national security and interests”.

“Acute threats” from China and Russia may “offer our adversaries the ability to remotely access and manipulate these devices, exposing sensitive US data”, the Commerce Department said in a statement.

The public has 60 days to submit comments, including national security risks linked to certain ICTS transactions involving drones, threats posed by foreign adversaries and the potential economic impact of the proposed regulations on affected entities.

Without naming China or Russia, Commerce Secretary Gina Raimondo said securing the unmanned aircraft systems technology supply chain was “critical” to safeguarding security.

Alan Estevez, an undersecretary for industry and security who heads the BIS, said the Commerce Department had sought to “proactively understand – and most effectively address – these vulnerabilities in the commercial drone market”.

Commonly used for surveillance and delivery, drones have become a focal point in US-China tensions.

China leads in the global production of commercial drones and accounts for the vast majority of their sales in the US. The US has stiffened its restrictions on Chinese drones to reduce that dependence.

Staff writers

• Do you think the Biden administration has reasonable data and safety concerns regarding Chinese drones?

• What are some consequences of the US banning Chinese drones?