GST Rate on Popcorn: The Goods and Services Tax (GST) rate on popcorn has been a topic of interest for consumers and businesses alike, especially after the recent 55th GST Council meeting. Here’s everything you need to know about the GST rate on popcorn, its classification, and how it impacts pricing in various scenarios.
GST Rate on Popcorn: Has the GST Rate on Popcorn Increased?
No, there has been no increase in the GST rate on popcorn. During the 55th GST Council meeting, a request from Uttar Pradesh was discussed regarding the classification and GST rate applicable on popcorn mixed with salt and spices. The Council recommended issuing a clarification to resolve this issue, ensuring transparency and avoiding disputes regarding the popcorn category under GST.
GST Rate on Popcorn: Why Do Different Types of Popcorn Have Varying GST Rates?
The GST rates on popcorn and other goods are determined based on the Harmonized System (HS) classification, an international standard maintained by the World Customs Organization (WCO). This classification, used globally, ensures uniformity in the categorization of goods.
- Namkeens (like spiced popcorn) are classified under HS 2106 90 99:
- 5% GST applies if sold in loose or unpackaged form.
- 12% GST applies if sold in pre-packaged and labeled form.
- Sugar Confectionery, such as caramel popcorn, falls under HS 1704 in Chapter 17 and attracts 18% GST, except for specific exemptions.
This system ensures consistent taxation but results in varying rates based on the type of popcorn and its preparation.
GST Rate on Popcorn: Objective of the Recent Clarification
The clarification issued by the GST Council aims to resolve disputes related to the classification of ready-to-eat popcorn mixed with salt and spices. By ensuring uniform interpretation, the Council intends to simplify tax compliance and provide clarity to businesses and authorities.
GST Rate on Popcorn: Impact on Popcorn Prices in Theatres
Popcorn served in theatres is typically offered in loose form. As per GST rules, such popcorn continues to attract a 5% GST rate, as it falls under the category of restaurant services when sold separately from cinema exhibition services. Therefore, there will be no significant increase in the cost of popcorn in theatres unless served in pre-packaged and labeled form.
The GST rate on popcorn remains unchanged, with classifications based on the HS system dictating the applicable rates. The Council’s recent clarification ensures smooth tax compliance and resolves ambiguities surrounding ready-to-eat popcorn. Consumers can rest assured that their favorite theatre snack will not see a price hike due to GST.
