Popcorn, sold in loose form in cinemas, will continue to attract 5 per cent GST like in restaurants, according to government sources.
On the other hand, if popcorn is clubbed together and sold with a cinema ticket, the supply will be treated as a composite supply and taxed according to the applicable rate of the principal supply, which in this case is the ticket.
The 55th meeting of the GST council clarified the applicability of GST in popcorn as, after receiving a request from Uttar Pradesh to clarify its classification and applicable GST rate on popcorn mixed with salt and spices, there had been no increase in GST rate on popcorn.
The loose form in which popcorn is served to customers in theaters will continue to attract the rate of 5 percent as applicable to 'restaurant service' as long as supplied independently of the cinema exhibition service, according to the sources.
Under GST, this popcorn mixed with salt and spices is namkeen and attracts a 5 per cent tax. Pre-packed and labelled attracts the rate of 12 per cent.
All sugar confectionary, except the few specified items, attract 18 per cent GST, and hence, caramelised popcorn attracts an 18 per cent rate.
The council recommended the issuance of clarification to facilitate the resolution of classification disputes in the field on ready-to-eat popcorn that is mixed with salt and spices, the government sources noted.
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 more than 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.
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