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GST on popcorn: Popcorn sold in loose form at movie theatres will continue to attract 5 per cent GST, similar to the rate applied in restaurants, according to government sources. However, if the popcorn is sold bundled with a movie ticket, the transaction will be treated as a composite supply and taxed according to the rate of the principal supply, which in this case is the movie ticket.
The 55th meeting of the GST Council clarified the GST applicability in popcorn after it received a request from Uttar Pradesh to clarify the classification and GST rate applicable to popcorn mixed with salt and spices.
No increase in GST rate on popcorn
The GST rate on popcorn remains unchanged following the recent GST Council meeting. There has been no increase in the GST rate on popcorn.
“Popcorn is served to customers in theatres in loose form and hence will continue to attract a rate of 5 per cent as applicable to ‘restaurant service’ as long as supplied independently of the cinema exhibition service,” according to the sources.
Under GST, popcorn mixed with salt and spices is classified as namkeen and is taxed at 5 per cent. However, if the popcorn is pre-packed and labeled, it attracts a 12 per cent GST. All sugar confectionery items, except for a few specified ones, are taxed at 18 per cent. As a result, caramelised popcorn falls under this category and is taxed at an 18 per cent rate.
Clarification issued to resolve classification disputes
The GST Council recommended issuing a clarification to help resolve classification disputes related to ready-to-eat popcorn mixed with salt and spices, according to government sources.
All goods, including food items, are classified under GST as per the Harmonised System (HS) classification, which is a multipurpose international goods nomenclature developed by the World Customs Organisation (WCO). This system is used by over 200 countries, covering over 98 per cent of the international trade. The varying GST rates are only consequential to the classification of the commodity under different chapters of the HS system.
(With PTI inputs)
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