GST Council to clarify rates on ready-to-eat popcorn

The GST Council Adjustment Committee, comprising central and state revenue officials, has proposed clarifications to address uncertainties related to the tax treatment of ready-made popcorn with a view to simplifying its classification and applicable GST rates. These recommendations are expected to bring relief to businesses and ensure , that the tax rates will be in line with the product specifications.

According to the committee, prepared or ready-to-heat maize kernels mixed with spices, oil or flavorings should be included under HS 2008, which covers prepared or preserved edible plant parts, attracting 12 per cent GST.

Plain popcorn, made by swelling corn without additives, is classified under HS 19041090 and attracts 18 percent GST; a category applicable to most products, except for special products like puffed rice or flat rice, which are taxed at 5 percent GST.

The issue primarily revolves around ready-made popcorn mixed with salt and spices. The committee has proposed to classify such products under HS 2106 90 99. They will attract 5 percent GST if sold unpackaged or pre-packaged and labeled and 12 percent GST if sold. in prepackaged and labeled forms.

Additionally, caramel popcorn or popcorn mixed with sugar, which changes its nature to sugar confectionery, will be classified under HS 1704 90 90 and will be subject to 18 percent GST.

To resolve any lingering disputes, the committee has suggested settling the past issues on an “as is” basis without retroactive changes. If the GST Council accepts these recommendations, it will not only clarify the tax rates but also potentially make certain types of ready-made popcorn more affordable for consumers.

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