GST Council Clarifies Popcorn Tax Rates

The GST Council clarifies the taxation rates for popcorn, stating that pre-packaged and labelled ready-to-eat popcorn attracts a 12% tax, while caramel popcorn incurs an 18% GST. Unpackaged popcorn mixed with spices attracts a 5% GST. A CBIC circular will soon clarify these distinctions further.

The GST Council has settled the tax rates for various types of popcorn by issuing a clarification. The decision specifies that pre-packaged and labelled ready-to-eat popcorn will be subject to a 12% Goods and Services Tax (GST), whereas caramel popcorn will incur an 18% levy, thereby adhering to the sugar confectionery category.

There is no alteration in the basic tax rate for popcorn. However, the Central Board of Indirect Taxes and Customs (CBIC) is expected to release a circular that will further clarify the existing taxation framework regarding popcorn sales and distribution.

According to the clarification, 'ready-to-eat popcorn' that is simply mixed with salt and spices falls under the namkeen category, attracting a 5% GST if it is not packaged and labelled. In contrast, packaged and labelled versions will face a 12% GST, with caramel versions classified as confectionery subject to higher taxation.

(With inputs from agencies.)