GST Council Meeting: Are Your Popcorns Set To Be Expensive? FM Nirmala Sitharaman Clarifies

GST Council Meeting: In a recent statement during the GST Council Meeting, Finance Minister Nirmala Sitharaman provided clarity on the taxation of popcorn, addressing concerns that had raised confusion across the country. 

According to Sitharaman, the distinction between salted, caramelised, and plain popcorn lies in its sugar content, which ultimately affects the applicable Goods and Services Tax (GST) rate.

Sugar triggers higher tax

The Finance Minister highlighted that while plain salted popcorn is being marketed as a type of namkeen in various states, caramelised popcorn contains added sugar, thereby changing its tax treatment.

She said that any product, whether it's a carbonated drink or juice, with added sugar falls under a different tax category, which is why caramelised popcorn attracts a higher rate.

Popcorn tax breakdown

The GST Council has decided to issue an official clarification, detailing the tax structure for popcorn.

For clarity, ready-to-eat popcorn that is mixed with salt and spices, which closely resembles the character of namkeen, is currently taxed at 5% GST if sold unpackaged. 

For pre-packaged and labelled popcorn, the tax rate remains at 12%. However, when popcorn is caramelised (with sugar), it takes on the characteristics of a sugar confectionery, shifting its classification under HS 1704 90 90, and thus, an 18% GST will apply.

Additionally, the council announced a reduction in the tax rate for fortified rice kernels, which will now be taxed at just 5%. The council merely agreed that the Central Board of Indirect Taxes and Customs (CBIC) would issue a circular to further explain the existing tax structure.