'This is silly...': Mohandas Pai says GST complexity will hold Indians hostage to 'rent-seeking officials'

India’s Goods and Services Tax (GST) system has come under sharp criticism, with former Infosys CFO Mohandas Pai taking aim at its ambiguities. “This is silly and complex. It will lead to tax terrorism,” Pai wrote on X, adding that it is making citizens “hostages to rent-seeking officials” and creating endless disputes. 

His message to the government: “GST needs to be simplified. Not this.”

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Pai’s criticism follows a fiery statement from former Chief Economic Adviser Arvind Subramanian, who labeled the system a “national tragedy.” Subramanian argued that GST has drifted far from its promise of being a “Good & Simple Tax,” blaming the government for escalating complexity and enforcement issues. 

“We’re moving toward greater irrationality,” he warned on X, describing the situation as both chaotic and sad.

The outrage stems from decisions made at the 55th GST Council meeting, chaired by Finance Minister Nirmala Sitharaman. While some announcements aimed to provide relief — like reducing GST on fortified rice to 5% and exempting gene therapies — others sparked ridicule. A case in point: caramelized popcorn now faces an 18% GST, while salted popcorn sits at 12%. 

Critics, including Subramanian, pointed to these disparities as proof of a convoluted system.

Other decisions added to the confusion. Peer-to-peer used EV sales were exempted from GST, and payment aggregators handling transactions below ₹2,000 got relief. However, the council deferred taxing food delivery platforms over delivery charges, leaving businesses in limbo.

For Pai and Subramanian, the broader concern is the increasing complexity of the GST framework. They argue that the system is alienating businesses and citizens, creating disputes instead of solutions. “Simplify it,” Pai urged, warning that the current approach could spiral into chaos.