GST Council issues clarification on popcorn taxation, caramel popcorn to attract 18% tax

GST Council on Saturday agreed to issue a clarification on taxation of popcorn, saying that pre-packed and labelled ready-to-eat snacks will attract a 12% tax while an 18% GST will be levied if it is caramelised.

There is no change in the tax rate of popcorn and the GST Council has only agreed that the Central Board of Indirect Taxes and Customs (CBIC) will issue a circular clarifying the current taxation regime of popcorn.

"Ready-to-eat popcorn", which is mixed with salt and spices, and has the essential character of namkeens currently attracts a 5% GST if it is not pre-packaged and labelled.

If it is supplied as pre-packaged and labelled, a 12% GST is levied.

However, when popcorn is mixed with sugar (caramel popcorn), its essential character changes to that of a sugar confectionary, and would therefore be classifiable under "HS 1704 90 90" and attract an 18% GST, as per the clarification.