Have you ever wondered if you have expensive tastes? When you watched Carrie Bradshaw drop her rent money on shoes, did you mutter to yourself, “I would never pay that much for that!” or did you cheer her on? Well, if you’re still wondering, the Indian government has come up with a new way to test your tastes—the answer lies in the kind of popcorn you buy. Depending on whether you prefer namkeen or meetha paapcarn, we can now certify the royalty of your palate.

When GST was introduced, it was marketed as the cure to India’s complex taxation system—a system that promised simplicity and fairness for consumers. But now, nearly eight years later, GST has morphed into something far more complicated than the haven it was made out to be. Take, for example, the taxation of popcorn—a snack that is literally just a simple, two-step process: warm some kernels, put them in a packet, and voilà. Yet in the 55th GST Council Meeting held recently, Finance Minister Nirmala Sitharaman laid out new amendments that complicate even this humble snack.
Here’s how it goes: ready-to-eat popcorn garnished with salt and spices will be taxed at 5% if unlabelled and 12% if pre-packaged. However, caramel popcorn—which includes sugar—will be taxed at a whopping 18%. According to her, adding sugar to popcorn transforms it from just an average snack into a “sugar confectionery,” making it eligible for dessert-level taxation. And what happens when caramel and salted popcorn are mixed together? Does the sugar make it a dessert, or does the salt’s savory strength overpower the sweet and reclaim its status as an average snack? No answers yet. The Great Popcorn Debate lives on.

A couple of months ago, I found myself discussing India’s economy at a party. I confidently touted the record GST collections India has achieved over the years as proof of our insatiable demand. But my enthusiasm was met with a sharp rebuttal: “If the economy is doing so well, why are FDIs at record lows?” Fair question. Back in June 2024, net FDI inflows had plummeted from USD 42 billion in FY23 to USD 26.5 billion in FY24. More recently, there’s been a glimmer of hope—FDI inflows in October 2024 were 26% higher than the same time last year. The government claimed there was no decline in investor interest in India and blamed the contraction on repatriation and disinvestment from profitable exits.

To break it down, “Gross FDI” refers to the total value of foreign direct investment flowing into a country, including new investments and reinvested earnings. Meanwhile, “Net FDI” deducts the outflows caused by divestments or repatriation of earnings by foreign investors. This includes all forms of FDI, even in the stock market. And when it comes to the stock market, the trend paints a less rosy picture. In October 2024, global funds withdrew $10 billion from Indian stocks, leading to a significant correction in the indices.

Over the past decade, India has basked in the spotlight as the new darling of global investors. A post-pandemic shift away from China made India the place to be. But while this attention was helpful initially, India’s stock market has become exorbitantly expensive. “When they launched ‘Make in India,’ every company landing a government contract got flooded with capital from investors. The optimism was sky-high, and investors expected instant returns. But that’s not how India works,” said Dhananjay, a trader who focuses on Indian markets. “Signing a contract doesn’t mean immediate revenue. Some projects are on hold, others are still waiting for payments. Valuations built on the assumption of exponential growth next year are unrealistic and need recalibration.”

Dhananjay’s assessment rings true. In October this year, the NSE Nifty 50 Index suffered its worst monthly performance since March 2020, losing 6.2%.

On my way home from that party, I kept replaying the conversation in my head, trying to craft the perfect response. And now it’s clear to me: the surge in GST collections isn’t a sign of growth—it’s the result of relentless tax hikes on anything remotely consumable.

Take insurance premiums, for example:

• Health and term life insurance: 18% GST on premiums

• Unit-linked insurance plans (ULIPs): 18% GST on the insurance component

• Annuity plans: 4.5% GST on first-year premiums, and 2.25% on renewals from the second year onward

• General insurance: 18% GST on premiums

Even delayed premium payments are taxed—GST is levied on interest charges unless the policy is exempt. And this raises a larger question: should insurance services even fall under the purview of taxation? While taxation is a tool of fiscal policy to regulate the flow of money, there’s a fine line between collecting taxes and overburdening consumers. Taxation can be used to curb spending, but applying exorbitant rates to necessities only stifles people further. Does the government know what it’s aiming to achieve with its policies? Some things, perhaps, are best left unsaid.

So, while Carrie gallops from New York to Paris in search of the perfect shoe, I’ve decided to indulge myself as well.

Bhaiya, caramel extra dalo. Aaj I am treating myself!