The 55th GST Council Meeting in Jaisalmer has agreed to issue a clarification on the taxation of popcorn, addressing different GST rates based on packaging and composition. The Council confirmed that there is no change in the tax rates, but a circular will be issued by the Central Board of Indirect Taxes and Customs (CBIC) to eliminate ambiguities.
Key clarifications on popcorn GST rates:
- Ready-to-eat salted popcorn (unpackaged):
- Tax rate: 5%
- Classified as namkeens if not pre-packaged and labelled.
- Pre-packaged and labelled salted popcorn:
- Tax rate: 12%
- Applies to ready-to-eat salted popcorn mixed with spices and sold in pre-packaged and labelled form.
- Caramelized popcorn:
- Tax rate: 18%
- Classified as sugar confectionery under HS 1704 90 90 due to its composition with added sugar.
The Council emphasized the importance of clear classifications, noting that salted popcorn retains the character of a namkeen, while caramelized popcorn falls under the sugar confectionery category due to its ingredients. The CBIC’s circular aims to ensure uniform compliance and understanding of the current taxation regime.
