Clarity Ahead: GST Council to Address Tax Rates for Popcorn
Clarity Ahead: GST Council to Address Tax Rates for Popcorn
The Fitment Committee of the GST Council, which consists of officials from both central and state revenue departments, has suggested clarifications to resolve uncertainties regarding the tax treatment of ready-to-eat popcorn. The goal is to simplify its classification and the applicable GST rates, which should benefit businesses and ensure that tax rates reflect the nature of the products.
According to the committee, ready-to-cook or ready-to-heat corn kernels that are mixed with spices, oil, or flavors should be categorized under HS 2008, which includes prepared or preserved plant parts and would be subject to a 12 percent GST.
Plain popcorn, made by expanding maize without any additives, is classified under HS 19041090 and incurs an 18 percent GST, which is the standard rate for most products, excluding specific items like puffed rice or flattened rice that are taxed at a lower rate of 5 percent. The main concern lies with ready-to-eat popcorn that is seasoned with salt and spices. The committee has proposed to classify these products under HS 2106 90 99, with a GST of 5 percent for unpackaged or non-pre-packaged items and 12 percent for those that are pre-packaged and labeled.
Caramel popcorn, or popcorn that is mixed with sugar and considered a type of sugar confectionery, falls under HS 1704 90 90 and is subject to an 18 percent GST.
To address any ongoing disputes, the committee has proposed to regularize previous issues on an “as-is” basis without making any retrospective changes. If the GST Council approves these recommendations, it will clarify tax rates and could potentially lower the prices of certain ready-to-eat popcorn for consumers. The 55th GST Council is scheduled to meet in Jaisalmer, Rajasthan, on December 20 and 21 to discuss this matter.
