Get ready to pay for Ready-to-eat Popcorn 18% GST!

Now, you will need to pay for ready-to-eat Popcorn 18% GST. The Gujarat Bench of the Authority of Advance Ruling (AAR) has stated that the rate of the GST on popcorn in India should now be raised to from 5% to 18%.

Let us understand this new concept GST on popcorn in India.

Authority for Advance Rulings on taxability of popcorn

The Gujarat Bench of the Authority of Advance Ruling (AAR) has given the logic behind placing popcorn in 18 per cent GST slab.

The logic of Authority for Advance Rulings on taxability of popcorn is that to make ready-to-eat Popcorn, corn grains are heated and mixed with other ingredients such as salt. Hence, ready-to-eat Popcorn must be subject to GST.

Recently, the Karnataka Government had clarified about GST on Roti and Paratha

Karnataka Government Clarifies GST on Roti and Paratha

Applicability of popcorn 18% GST

The 18% GST on popcorn in India shall apply to any company having GST registration, which sells Popcorn in a plastic-closed pack under the registered brand name. Earlier, the logic was that these are made from regular maize (corn) grains, which falls in the category of grains. Hence, 5% GST was levied. Some companies had argued that despite heating the corn grains, its basic properties do not change.

However, the AAR stated that after roasting, the Popcorn falls into the ready-to-eat category. Hence, these should attract GST @ 18%.

A few days ago, a similar decision was given by the Karnataka Bench of AAR.  It placed paratha under 18% GST, differentiating it from roti.

5% of GST is applied on bread. The Karnataka AAR had said that roti or puri is ready to be eaten, while the paratha has to be heated. Hence, paratha shall attract 18% GST.

With this, we come to the conclusion that for ready-to-eat Popcorn 18% GST is applicable. Nevertheless, the companies selling such ready-to-eat Popcorns must get mandatory GST registration.