GST Council May Simplify Tax Rules for Popcorn
The Fitment Committee of the GST Council, made up of central and state revenue officials, has recommended changes to clear up confusion about how ready-to-eat popcorn is taxed. These changes aim to make tax rates fairer for businesses and align them with the nature of the products.
Proposed Tax Categories for Popcorn
The committee has suggested the following tax rates for different types of popcorn:
- Ready-to-Cook or Ready-to-Heat Corn Kernels:
- Includes kernels mixed with spices, oil, or flavors.
- Proposed classification: HS 2008 (prepared or preserved plant parts).
- GST rate: 12%.
- Plain Popcorn:
- Made by popping maize without any added ingredients.
- Classification: HS 19041090.
- GST rate: 18% (the standard rate for most products).
- Seasoned Ready-to-Eat Popcorn:
- Includes popcorn flavored with salt, spices, or other seasonings.
- Proposed classification: HS 2106 90 99.
- GST rates:
- 5% for unpackaged or non-pre-packaged items.
- 12% for pre-packaged and labeled items.
- Caramel Popcorn or Sweet Popcorn:
- Mixed with sugar and classified as a type of sugar confectionery.
- Classification: HS 1704 90 90.
- GST rate: 18%.
Resolving Disputes
The committee has also recommended that any past tax disputes be settled based on the current situation without applying changes retroactively. This approach would help businesses avoid penalties or confusion over past classifications.
Potential Consumer Impact
If these recommendations are approved by the GST Council, it could lead to clearer tax rules and possibly lower prices for some ready-to-eat popcorn varieties.
Next Steps
The GST Council will discuss these recommendations at its 55th meeting, scheduled to take place on December 20 and 21 in Jaisalmer, Rajasthan.
