Popcorn has always been the go-to companion for movie lovers, but now, it’s grabbing attention for a different reason—taxes.
The announcement by the GST Council on Saturday regarding GST on it has sparked lively debates, with memes flooding social media and consumers questioning if their movie nights just got more expensive.
So, how does this impact your popcorn cravings? Let’s break it down.
Popcorn sold loose in cinemas will continue to be taxed at a 5% GST rate, the same as restaurant services, reported news agency PTI citing government sources.
However, if popcorn is bundled with a movie ticket, it will be treated as a composite supply. In such cases, the applicable tax rate will be based on the principal item, which is the movie ticket.
During its 55th meeting, the GST Council clarified the tax treatment for popcorn after a request from Uttar Pradesh to specify the GST rate for popcorn seasoned with salt and spices.
There has been no change in the GST rate for popcorn. Popcorn served in cinemas as a standalone item is considered part of restaurant service and remains taxed at 5%. When mixed with salt and spices, popcorn is classified as namkeen under GST and also attracts a 5% rate. However, if it is pre-packed and labelled, the tax increases to 12%.
Caramelised popcorn falls into the category of sugar confectionery, which typically attracts an 18% GST rate.
To address disputes over the classification of ready-to-eat popcorn with added salt or spices, the GST Council has recommended issuing a clarification.
Under GST rules, the classification of goods, including food items, is guided by the Harmonised System (HS) classification. Developed by the World Customs Organisation (WCO), this system is used by over 200 countries and accounts for more than 98% of global trade. GST rates are determined by the specific classification of a product within the HS framework.