India’s GST Council has finally laid to rest the controversy over taxation of salted popcorn and caramel popcorn. And you, dear reader, will be either enthused or disappointed—depending on your taste.
Under GST 2.0, popcorn mixed with salts and spices will attracted GST at 5%, whether sold loose or pre-packaged and labelled since that retains “essential character” of the snack. Caramel popcorn will be taxed at 18% as it’s “non-essential” as a sugar confectionery, according to the list of items with new GST rates released by the government.
Earlier, salted popcorn was taxed at 5% if sold loose and at 12% if in branded packaging. Caramel popcorn was taxed at 18%, irrespective of the packaging.
A popcorn controversy since GST 1.0
When India’s Goods and Services Tax was first introduced on 1 July, popcorn—being a processed food item—was placed under different tax slabs, depending on how it was sold. While branded and packaged popcorn attracted 12% GST, loose popcorn was exempt altogether.
That dual structure was confusing to both small vendors and multiplexes.
In 2018, multiplexes, which sold popcorn at high mark-ups, argued that the snack sold in cinema halls should be treated as restaurant service (5% GST) and not as a packaged commodity (12% GST).
A year later, the GST Council defined popcorn as snacks: popcorn sold in a cinema or restaurant-style counter would attract 5% GST while branded popcorn would be taxed at 12%. This demarcation was challenged in courts over the next couple of years.
In 2022, the Multiplex Association of India lobbied for uniform treatment, citing that popcorn is “freshly prepared” and not comparable to FMCG.
GST Rationalisation
The “GST on popcorn” controversy popped up once again when the GST Council first started discussion rationalisation in 2023. Popcorn, and other snacks like namkeen, chips and roasted corn, were flagged since they were taxed under multiple slabs.
In 2024, when snacks at the multiplex started costing a bomb, the debate resurfaced on whether cinema popcorn is a luxury food or a basic snack. The government’s solution—tax it according to flavour.