The GST Council, during its 55th meeting on Saturday, clarified the taxation rules for popcorn, reaffirming that there would be no change in the existing rates. Union Finance Minister Nirmala Sitharaman explained that the tax treatment varies depending on the type of popcorn and its classification.
Key Highlights
Tax Rates on Popcorn:
- Pre-packaged and labelled ready-to-eat popcorn attracts a 12% GST.
- Caramelized popcorn, classified as sugar confectionery under HS code 1704 90 90, attracts 18% GST due to the addition of sugar.
- Non-pre-packaged and unlabelled popcorn mixed with salt and spices, resembling namkeens, attracts 5% GST.
Clarification from CBIC: The Central Board of Indirect Taxes and Customs (CBIC) will issue a circular to address any confusion regarding the taxation of popcorn.
Other GST Decisions:
- Fortified rice kernels: GST rate reduced to 5%.
- Agricultural produce: Black pepper and raisins supplied directly by farmers will be exempt from GST.
- Deferred decisions: No final call was made on GST for food delivery platforms like Swiggy and Zomato or on reducing GST rates for insurance premiums.
Minister's Remarks
Finance Minister Sitharaman stated, “Salted, caramelised, plain popcorn is being sold as namkeen in certain states. Caramelised popcorn comes with added sugar, so the treatment rate is different from namkeen.”
This clarification ensures businesses and consumers are aware of the distinct classifications and tax treatments for various popcorn types.
Conclusion
The GST Council’s decision to provide clarity on popcorn taxation reflects its commitment to resolving ambiguities in tax compliance. The council also made significant decisions regarding food grains and deferred key discussions, keeping stakeholders across sectors engaged.
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