The GST Council’s Fitment Committee which comprises of central and state revenue officials has proposed clarifications to address ambiguities surrounding the tax treatment of ready-to-eat popcorn, aiming to streamline its classification and applicable GST rates. These recommendations are expected to bring relief to businesses and ensure tax rates align with product characteristics.
As per the committee, ready-to-cook or ready-to-heat corn kernels mixed with spices, oil, or flavours should fall under HS 2008, which covers prepared or preserved edible plant parts, attracting 12 per cent GST.
Plain popcorn, obtained by swelling maize without additives, is classifiable under HS 19041090 and attracts 18 per cent GST -- a category applicable to most goods except specific items like puffed rice or flattened rice, which are taxed at 5 per cent GST.
The issue primarily revolves around ready-to-eat popcorn mixed with salt and spices. The committee has recommended classifying such products under HS 2106 90 99. These would attract 5 per cent GST if sold unpackaged or not pre-packaged and labelled, and 12 per cent GST if sold in pre-packaged and labelled forms.
Additionally, caramel popcorn or popcorn mixed with sugar, altering its character to sugar confectionery, would be classified under HS 1704 90 90 and taxed at 18 per cent GST.
To resolve any lingering disputes, the committee has suggested regularizing past issues on an “as-is” basis without retrospective changes. If the GST Council accepts these recommendations, it will not only clarify tax rates but also potentially make certain types of ready-to-eat popcorn more affordable for consumers.
The 55th GST Council is slated to meet in Jaisalmer, Rajasthan on December 20 and 21 to address this issue.