Popcorn sold in loose form at movie theatres will continue to attract a 5 per cent GST rate, the same as in restaurants, government sources confirmed.
However, if the popcorn is bundled and sold together with a movie ticket, the supply will be treated as a composite supply and taxed according to the applicable rate of the principal supply, which is the ticket.
The clarification on the GST applicability to popcorn was issued following a request from Uttar Pradesh to clarify the classification and GST rate on popcorn mixed with salt and spices.
There has been no increase in the GST rate for popcorn. When served independently of the cinema exhibition service, popcorn, in its loose form, will continue to be taxed at 5 per cent, as per the 'restaurant service' rate, sources confirmed.
Under GST, popcorn mixed with salt and spices is classified as namkeen and attracts a 5 per cent tax. If pre-packed and labelled, the rate rises to 12 per cent.
All sugar confectionery items, except for a few specified ones, attract an 18 per cent GST rate, which includes caramelised popcorn.
The GST Council recommended issuing clarification to help resolve classification disputes regarding ready-to-eat popcorn mixed with salt and spices.
Under GST, all goods, including food items, are classified according to the Harmonised System (HS) classification, a multipurpose international goods nomenclature developed by the World Customs Organization (WCO).
This system is used by over 200 countries and covers over 98 per cent of global trade. The varying GST rates are determined by the classification of the commodity under different chapters of the HS system.
Follow us
