The GST Council, led by Finance Minister Nirmala Sitharaman, has clarified the tax treatment of popcorn. It has been decided that pre-packed and labelled ready-to-eat popcorn will attract a 12% GST, while caramelised popcorn (mixed with sugar) will be taxed at 18%.
Importantly, there is no change in the existing tax rates. The Council has simply agreed that the Central Board of Indirect Taxes and Customs (CBIC) will issue a circular to provide further clarity on the current taxation rules for popcorn.
Under the current system, ready-to-eat popcorn, which is typically mixed with salt and spices and has the characteristics of namkeens, attracts a 5% GST if it is not pre-packaged or labelled. If it is pre-packaged and labelled, the GST rate is 12%.
However, when popcorn is coated with sugar to make caramel popcorn, it takes on the characteristics of a sugar confectionery and is classified under HS code 1704 90 90, which attracts an 18% GST.
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