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From Salty to Sweet: How popcorn popped the GST reform debate
Under the new system, all varieties of popcorn will now attract a uniform 5% GST, Finance Minister Nirmala Sitharaman announced.
Union Finance Minister Nirmala Sitharaman said the classification of popcorn under multiple GST slabs pushed her to rethink the system and make it clearer and free of anomalies. In an interview with Network18 Group Editor-in-Chief Rahul Joshi, she explained that the levy of 5%, 12% or 18% GST on popcorn depending on its packaging, material, or flavour had drawn criticism and triggered litigation.
“I, without hesitation, will bring up the example of popcorn. Why do I say ‘hesitation’? Because I was pilloried for it. But that shows the problem of classification. GST was an improvement over the pre-GST era where every state had its own definitions and rates. Yet, it still needed simplification. In the case of popcorn, courts gave conflicting judgments and states lost revenue because of loopholes. For instance, higher-taxed sugary, chocolate-coated popcorn was passed off as salted popcorn to attract lower tax,” she said.
Under the new system, all varieties of popcorn will now attract a uniform 5% GST, Sitharaman announced.
Describing the reclassification exercise as “rigorous yet fascinating,” the finance minister said the intent was not just revenue collection but also reducing consumer confusion.
According to official data, of the 453 goods where GST rates were revised, 413 saw a decrease, while only 40 items became costlier. Nearly 295 goods have been brought down to a 5% or NIL tax bracket from the earlier 12%.
“Today, 99% of all goods and services under GST fall into either the 0%, 5% or 18% slabs. The remaining 1% applies only to demerit or ‘sin’ goods. That shows the extent to which we’ve cleaned up the system—removing anomalies, doubts, duplication, and interpretative issues,” the Finance Minister said.
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