GST Rates on Ready-to-Eat Popcorn: Clarity Incoming!

17 December 2024 /

Category : efiletax

GST Rates on Ready-to-Eat Popcorn: What Businesses Need to Know

The GST Council’s Fitment Committee has proposed crucial clarifications on GST rates for ready-to-eat popcorn. This move aims to address ambiguities in popcorn classification and applicable GST rates. These recommendations, if approved, could provide much-needed clarity for businesses and make certain popcorn types more affordable for consumers.

GST Classification for Different Popcorn Types

1. Ready-to-Cook or Ready-to-Heat Popcorn

  • Classification: HS Code 2008
  • Description: Corn kernels mixed with spices, oil, or flavours.
  • GST Rate: 12%

2. Plain Popcorn (No Additives)

  • Classification: HS Code 19041090
  • Description: Swelled maize without any additives.
  • GST Rate: 18%

3. Ready-to-Eat Popcorn (Salt & Spices Added)

  • Classification: HS Code 2106 90 99
  • GST Rates:
    • Unpackaged or Not Pre-packaged: 5%
    • Pre-packaged and Labelled: 12%

4. Caramel or Sugary Popcorn

  • Classification: HS Code 1704 90 90
  • Description: Popcorn mixed with sugar, making it a sugar confectionery.
  • GST Rate: 18%

Why This Matters for Businesses

These clarifications aim to streamline popcorn classifications and remove uncertainties. For businesses involved in popcorn manufacturing and distribution, understanding these rates is crucial to:

  1. Avoid Tax Disputes: Clear guidelines help in accurate GST filings and prevent litigation.
  2. Pricing Strategies: Different GST rates affect the cost to consumers, helping businesses price products competitively.
  3. Compliance: Knowing the applicable HS codes ensures compliance with GST laws.

Upcoming GST Council Meeting

The 55th GST Council Meeting is set to take place in Jaisalmer, Rajasthan, on December 20-21, 2024. During this session, the Council is expected to discuss and potentially approve these recommendations. If accepted, businesses can look forward to a more straightforward tax regime for popcorn products.

Conclusion

The proposed clarifications on GST rates for ready-to-eat popcorn could bring significant relief to the industry. By categorising popcorn based on preparation methods and additives, the GST Council aims to eliminate ambiguity and ensure fairness in tax rates.

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