GST On Popcorn: Report Says No Hike In Tax On Snack, Loose Popcorn In Theatres To Still Attract 5% Tax

The report said the announcement regarding popcorn in the GST Council meeting was made to clarify the classification and tax slab applicable on popcorn mixed with salt and spices

The sources further stated that the Council received a request from Uttar Pradesh to issue clarification and the GST rate levied on the snack.

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After the GST Council decided to levy varying tax slabs on popcorn depending on its preparation and mix, now media reports have emerged stating that no increase has been implemented in GST applicable on the product.

Citing sources, Moneycontrol reported that the announcement regarding popcorn in the GST Council meeting was made to clarify the classification and tax slab applicable on popcorn mixed with salt and spices. However, no hike has been made in the tax levied on the snack.

The sources further stated that the Council received a request from Uttar Pradesh to issue clarification and the GST rate levied on the snack. “The Council recommended issuance of clarification to facilitate resolution of classification disputes in the field on ready to eat popcorn that is mixed with salt and spices,” the noted.

The report further said that this means popcorn served in loose form in theatres will continue to attract the tax rate of 5 per cent which is currently applicable. “Generally, Popcorn is served to customers in theatres in loose form and hence will continue to attract rate of 5 per cent as applicable to ‘restaurant service’ as long as supplied independent of the cinema exhibition service,” the sources added.

This clarification comes at a crucial time as Netizens have not taken well to what they understood as a hike in tax on popcorn. Earlier on December 21, the Council said that pre-packed and ready-to-eat popcorn will be taxed at 12 per cent GST, while caramelised popcorn will attract 18 per cent tax.

The report cited sources and explained that the different tax rates on popcorn are due to the Harmonised System (HS) classification, a multipurpose international goods nomenclature developed by the World Customs Organisation (WCO).