The Goods and Services Tax (GST) Council has clarified why different tax rates apply to salted and caramel popcorn, emphasizing that these disparities are based on the ingredients and categorization of the products. The 55th GST Council meeting, chaired by Union Finance Minister Nirmala Sitharaman, sought to address ambiguities surrounding these tax slabs.
Salted Popcorn: A “Namkeen” Category
Salted popcorn, often mixed with spices, is classified as a “ready-to-eat namkeen” when pre-packaged and labelled. This category is subject to a 12% GST. If the same popcorn is not pre-packaged, the tax rate drops to 5%. This classification aligns salted popcorn with other snack items sold across the country.
Caramel Popcorn: A Confectionery Delight
Caramel popcorn, on the other hand, falls under a different category due to its sugar content. This variant is classified as “sugar confectionery” under HS code 1704 90 90 and attracts an 18% GST. The higher tax rate reflects its positioning as a sweet treat rather than a traditional snack.
Ensuring Clarity in GST Rules
To prevent further confusion, the Central Board of Indirect Taxes and Customs (CBIC) will issue a circular detailing the existing taxation rules for popcorn. This move is expected to aid businesses and consumers alike in understanding the nuances of GST compliance.
Additional GST Council Highlights
The council also announced a reduction in GST for fortified rice kernels to 5%, reaffirming its commitment to promoting nutritional products. Moreover, items like black pepper and raisins supplied directly by farmers remain GST-exempt. However, key decisions, such as revising GST rates on insurance premiums and food delivery platforms like Swiggy and Zomato, were deferred for further review.
Conclusion
The GST Council’s clarification underscores its focus on addressing complexities in India’s tax system. By categorizing products based on their characteristics and composition, the council ensures consistency in tax application, aiding businesses in navigating compliance requirements.
Summary:
The GST Council clarified tax rates on salted and caramel popcorn. Salted popcorn is taxed at 12 percent when pre-packaged and labelled, while caramel popcorn attracts an 18 percent GST due to its sugar content. Fortified rice kernels now have a 5 percent GST, and items like black pepper and raisins from farmers are exempt.
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