GST ON POPCORN: WHY SO MUCH RATE COMPLICATIONS?  

 

The GST Council has clarified that there is no new imposition of any tax in the taxation of the popcorn. The present deliberation and release is merely a clarification as certain field units were demanding different tax rates on the same.

Taxability of Ready to eat Popcorn:

1. GST shall be 5% if popcorn is Mixed with salt and spices (HS code 2106 9099) and sold loose.

2. GST shall be 12% if the same popcorn Mixed with salt and spices (HS code 2106 9099) and sold in pre-packaged and labelled form

3. Now, who doesn’t love caramel popcorn, but ready to pay 18% tax if Popcorn is mixed with sugar thereby changing its character to sugar confectionary (eg caramel popcorn – HS code 1704 90 90)

A sigh of relief that whatever happened in past shall not get impacted basis “as is where is”. This is not a new change but just a clarification to settle the disputes arising out of interpretation.

World was a happy place munching popcorns at malls, movies, home, even popcorn with Netflix was good.

The question remains why the Government complicates the law so much. Why popcorn be simply a popcorn whether as a popcorn or a namkin or a sweet.

Undeniably, tax is place where everything has to be complicated and difficult. More interesting, it will be a composite supply if you are purchasing the mixed popcorn while watching the movie in a theatre?