GST Council discusses taxation on popcorn, caramelised popcorn in Jaisalmer meeting; taxes set at 12%, 18%

In a meeting held on Saturday in Jaisalmer, the GST Council reviewed and clarified the taxation policy on popcorn, among other items. The meeting focused on various food categories, with particular attention given to the tax rates applicable to ready-to-eat snacks and fortified rice kernels.

According to the GST Council’s discussions, pre-packed and labelled ready-to-eat snacks, including popcorn, will attract a 12 percent Goods and Services Tax (GST). However, a significant change was noted for caramelised popcorn, which will now be taxed at 18 percent, as it falls under the category of sugar confectionery. This higher tax rate is due to its classification under HS code 1704 90 90, which covers products containing sugar.

The tax rate on fortified rice kernels has also been reduced to 5 percent, a move aimed at making this nutritious staple more affordable for consumers.

Despite public interest, the Council clarified that there has been no change to the existing tax rate on popcorn itself. The Central Board of Indirect Taxes and Customs (CBIC) is expected to issue a circular to provide further clarification on the current taxation of popcorn, which has remained a subject of confusion in the past. Currently, popcorn served as "read-to-eat" is classified with namkeens and attracts a 5 percent GST if it is not pre-packaged and labelled. However, once packaged and labelled, it falls under the 12 percent tax bracket.

The decision has sparked an online debate, with many social media users humorously responding with memes and comments on the taxation of popcorn. Critics have pointed out the nuances of different snack classifications, leading to a lively discussion about GST policies on everyday products.

This clarification by the GST Council is expected to provide much-needed clarity to retailers and consumers alike, especially as the holiday season approaches.