The Central Board of Indirect Taxes and Customs (CBIC) has issued an important clarification regarding the Goods and Services Tax (GST) rates applicable to popcorn, addressing the varying rates based on preparation and packaging. Here’s a breakdown of the GST rates on popcorn:
GST Rates on Popcorn
| Popcorn Type | Packaging | HSN | GST Rate |
|---|---|---|---|
| Ready-to-eat popcorn with salt and spices | Pre-packaged and labeled | 2106 90 99 | 12% |
| Ready-to-eat popcorn with salt and spices | Other than pre-packaged and labeled | 2106 90 99 | 5% |
| Popcorn mixed with sugar (e.g., caramel popcorn) | Any | 1704 90 90 | 18% |
The CBIC has categorized popcorn based on its ingredients and packaging, leading to three distinct GST rates:
- Ready-to-eat popcorn with salt and spices (Namkeen): This category includes popcorn seasoned with salt and other spices, often sold as “namkeen.” The GST rate for this type of popcorn varies as follows:
- Pre-packaged and labeled: 12% GST. This applies to popcorn sold in sealed packages with branding and labeling.
- Other than pre-packaged and labeled: 5% GST. This covers popcorn sold loose or in unpackaged containers, such as at a movie theater or fair.
- Popcorn mixed with sugar (e.g., Caramel Popcorn): Popcorn coated or mixed with sugar, such as caramel popcorn, falls under a different category. This type of popcorn attracts an 18% GST, irrespective of packaging, due to its classification as a sugar confectionery.
Key Points
- Namkeen Character: Ready-to-eat popcorn mixed with salt and spices is classified as “namkeen” and falls under HSN 2106 90 99.
- Packaging Matters: The GST rate for salted/spiced popcorn varies based on packaging:
- 12% for pre-packaged and labeled popcorn
- 5% for unpackaged popcorn
- Sugar Content: Popcorn mixed with sugar, like caramel popcorn, is classified as a sugar confectionery under HSN 1704 90 90 and attracts an 18% GST.
- Regularization: To address prevailing doubts, the GST rate on ready-to-eat popcorn mixed with salt and spices for the period up to February 14, 2025, is regularized on an “as is where is” basis.
No New Imposition of Any Tax
CBIC has clarified that there is no new imposition of any tax in this regard. The clarification comes as certain field units were demanding different tax rates on the same product. Therefore, this recommendation by the GST Council aims to settle disputes arising from varying interpretations.
Earlier, experts indicated that consuming loose and salted popcorn in a movie theater could attract a GST rate of up to 18%. The GST rate for popcorn purchased together with movie tickets would be either 12% or 18%, depending on the ticket price, provided that the bundled supply meets the criteria of composite supply.
This clarification from the CBIC is expected to bring much-needed uniformity to the popcorn market. Businesses can now apply the correct GST rate accurately, avoiding potential penalties and confusion.
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