Popcorn sold in movie theatres in loose form will continue to attract GST at the same 5% as they do at restaurants, news agency PTI reported.
However, when popcorn is clubbed and sold together with the movie ticket, it would be treated as a composite supply and taxed as per the applicable rate of the principal supply, which is the ticket.
This comes after the 55th meeting of the GST Council led by Finance Minister Nirmala Sitharaman clarified the GST applicable for popcorn after a clarification request from Uttar Pradesh on popcorn mixed with salt and spices.
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This is because popcorn mixed with salt and spices is classified as namkeen under GST and, thus, attracts a 5% tax. However, when it is pre-packed and labelled, the GST rate goes up to 12%.
Sugar confectionery, apart from a few specified items, generally attracts an 18% GST rate. Thus, caramelised popcorn will also attract an 18%.
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All goods, including food items, are classified under GST as per the Harmonised System (HS) classification, which is a multipurpose international goods nomenclature developed by the World Customs Organisation (WCO), according to the report.
This system is the same one used by more than 200 countries, encompassing more than 98% of international trade.
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These varying GST rates are only consequential to the classification of the commodity under different chapters of the HS system, the report read.