Popcorn, the quintessential snack for movie lovers, has sparked an online debate—this time not over flavors but taxes. The spotlight is now on caramelised popcorn, which attracts a higher GST rate than its salted counterpart. So, what’s the catch? Let’s dive into the details.
Currently, the Goods and Services Tax (GST) structure differentiates popcorn based on its ingredients, packaging, and preparation methods:
This classification stems from the varied characteristics of popcorn preparations, leading to different tax treatments.
The GST Council, chaired by Finance Minister Nirmala Sitharaman, recently reviewed the tax treatment of popcorn and concluded that no changes in rates were necessary. Instead, the Central Board of Indirect Taxes and Customs (CBIC) will soon release a circular to provide additional clarity on taxation rules.
The higher GST on caramelised popcorn arises from its categorisation as a confectionery item due to the added sugar content, distinguishing it from savoury snacks or namkeens. This differentiation underscores the impact of preparation methods and ingredients on tax classification.
Disclaimer: This blog has been written exclusively for educational purposes. The securities mentioned are only examples and not recommendations. It is based on several secondary sources on the internet and is subject to changes. Please consult an expert before making related decisions.
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