GST Council to clarify prices of ready-to-eat popcorn

The GST Council’s Fitment Committee which is made up of central and state revenue officials has made clear recommendations to clear the uncertainty related to the taxation of ready-to-eat popcorn, with a view to streamlining its distribution and GST rates. These proposals are expected to bring relief to businesses and ensure that tax rates are in line with what businesses are producing.

According to the committee, corn that is ready to be cooked or heated, mixed with spices, oil, or flavoring should fall under HS 2008, which covers parts of processed or preserved plants, which attract 12 percent GST.

Small paps, which is obtained from puffed corn without additives, is classified under HS 19041090 and attracts 18 percent GST – a category that is used for most products except for products such as polished rice or smooth rice, which are taxed at 5 percent GST .

This article is about popcorn that can be eaten with salt and spices. The Committee has recommended placing such products under HS 2106 90 99. These would attract 5 percent GST if sold in unpackaged or prepackaged and labeled forms, and 12 percent GST if sold in prepackaged and labeled forms.

In addition, caramel popcorn or popcorn mixed with sugar, changing its appearance to sugar, can be classified under HS 1704 90 90 and taxed at 18 percent GST.

To resolve the pending disputes, the committee has proposed to revise the existing provisions “as is” without retroactive changes. If the GST Council approves the proposal, it will not only clarify the tax rates but also make other types of ready-to-eat popcorn available to consumers.

The 55th GST Council is scheduled to meet in Jaisalmer, Rajasthan on December 20 and 21 to address the issue.