GST Clarifies Tax Rates on Salted and Caramel Popcorn

The GST Council, in its 55th meeting on Saturday, clarified the difference in tax rates between salted and caramel popcorn, ensuring no change in the existing rates. Union Finance Minister Nirmala Sitharaman explained the rationale behind the variation, addressing questions raised by stakeholders.

Popcorn Taxation Explained

According to the GST Council, ready-to-eat salted popcorn is categorized as a namkeen, attracting a 12% GST rate if it is pre-packaged and labeled. Non-packaged and non-labeled popcorn enjoys a reduced tax rate of 5%.

On the other hand, caramelized popcorn, which includes added sugar, is classified under sugar confectionery (HS code 1704 90 90). This category is subject to an 18% GST. Sitharaman stated, “Caramelized popcorn comes with added sugar, so the treatment rate is different from namkeen.”

To prevent further confusion, the Central Board of Indirect Taxes and Customs (CBIC) will issue a circular to elaborate on the existing taxation rules for popcorn.

Other Key Announcements

• Fortified Rice and Farmer-Supplied Goods:
  The council reduced the GST on fortified rice kernels to 5%. Additionally, black pepper and raisins supplied directly by farmers were exempted from GST.
• Deferred Decisions:
  Some critical decisions were deferred for future meetings. These include:
  • Whether to reduce GST on insurance premiums.
  • The applicability of GST on food delivery platforms such as Swiggy and Zomato.

Finance Minister Sitharaman emphasized the need for further deliberations, particularly regarding the insurance sector, awaiting input from the Insurance Regulatory and Development Authority of India (IRDAI).

Conclusion

The GST Council’s clarifications aim to address public concerns about popcorn taxation and provide transparency. With other significant decisions deferred, the council continues to deliberate on crucial issues affecting various sectors.