Attempts to justify this by arguing that it helps control an epidemic of sugar-fuelled obesity weaken on considering the inconsistent approach taken to taxing sugar confectionery, which falls under HSN Code 1704.

Taxation is not uniform: some items, like elaichi dana, chikki, gajak etc, attract 5% GST; others like 'boiled sweets' attract 12%; while the rest attract 18%. The reasons for this apparently arbitrary classification are not adequately explained.

Also read: Mint Quick Edit | Don't over-roast popcorn with GST

Some items are thought to merit preferential treatment for being 'traditional,' while others are perceived to be consumed by the affluent and therefore deserving of higher taxes.

The problem with such perceptions is that consumer preferences are dynamic; items which may have once been the exclusive preserve of the rich can quickly become those of mass consumption.

A walk in any weekly haat-bazaar would reveal a variety of goods once available only in high-end department stores. The mobile phone best illustrates this, having graduated from being a status symbol to an essential component of our public policy of inclusion.

These complexities are compounded by litigation on these matters, with different courts making different interpretations of the statute. For instance, the 2018 Kerala Authority of Advance Ruling decision that Malabar parotta be taxed at 18% was overturned in 2024 by the Kerala high court, which placed it on par with bread and hence under the 5% slab.

Thus, the tradition of litigation under the excise tax regime continues. A recent Supreme Court judgement, for example, examined whether pure coconut oil packaged and sold in small quantities—ranging from 5ml to 2 litres— would be classifiable under edible oil or hair oil.

The judgement came about because an earlier two-judge bench was divided on this portentous matter.

The final ruling, pointing out that small sized containers are a feature common to both edible oil and hair oil, noted that classifying pure coconut oil as hair oil would not be acceptable unless the packaging of the good met all the requirements stated in the law, with the burden of proof resting upon the revenue department if it intends to classify under a heading different from that claimed by the assessee.

Merely the possibility that coconut oil could be used as hair oil is not sufficient to justify a changed classification.

The court, referring to an earlier Supreme Court judgement, said "it is good fiscal policy to not put people in doubt and quandary about their liability to pay duty […], once a specific heading was created for coconut oil […], something more would be required before such oil can be excluded therefrom and classified under the general heading pertaining to toilet and cosmetic preparation."

Good public policy should ideally reduce discretionary and arbitrary powers of the Executive, though this principle has been "more honoured in the breach than the observance." The original aim of GST was to end confusing litigation. Had it been a single rate, these decisions would not have been required in the first place.

However, the government had then argued that, keeping in mind India's heterogeneity and various requirements of public policy, charging all commodities uniformly would not be desirable.

Also read: Seven years of GST: Its adoption has been a remarkable success

Items of mass consumption and those consumed by the poor were classified under a concessional rate, while luxury items and those of 'sin' consumption attracted higher rates. While this principle is unexceptional, India's GST had two 'normal' rates of 12% and 18%, plus a concessional rate of 5% and a punitive rate of 28%.

Goods are moved from one slab to another on perceived-use characteristics, with no statistical basis whatsoever. This pick-and-choose approach creates enormous flexibility for revenue authorities to interpret statutes as per their own convenience.

This arbitrariness is further compounded by an opaque and unpredictable approach taken by tax authorities.

In writing this article, while searching for commodities and their tax classifications under HSN heading 1704 (relating to sugar confectionery), the author observed that the GST Secretariat repeatedly emphasizes that information on its sites is neither complete nor exhaustive, and the liability is entirely on taxpayers to find out the treatment applicable to their product or service.

There is no doubt that GST is a significant improvement over the earlier excise and sales tax regime, where revenue departments in different states (and the Centre) often took contrasting positions on the same commodity. However, while this has reduced, there is still much to be done.

The manner in which GST has been implemented, reflected in both GST Council deliberations and legal disputes, seems to reveal a desire to return to the old level of complexity.

Ease-of-doing-business reforms would require that GST be simplified in both letter and spirit.

For example, at present the GST Secretariat mandates that taxpayers report a minimum of 4 or 6 digits of the HSN code in their returns, based on their aggregate annual turnover in the preceding year. The reporting requirement has been kept at these levels to ease the taxpayer's burden.

In the same spirit and in accordance with the general principle enunciated by the Supreme Court, taxation should also be restricted to the same broad HSN code classification (i.e., commodities with the same 4-digit HSN code should attract the same tax).

Whether a 4-digit HSN code is grouped as concessional, normal or punitive should be based on hard statistical data that describes the character of these goods' consumption, and not merely on assertions and appeals to popular sentiment.

Also read: Reset GST to make it a 'good and simple tax'

A GST regime with uniform rates, based on clear statistical data, within a broad HSN four or six digit category could enhance fairness, reduce disputes and truly support the ease of doing business.

The author is a visiting professor at the Institute for Studies of Industrial Development and former chief statistician of India