The tax treatment of popcorn has become a huge ‘hot potato’ after the (GST) Council Meeting, led by Finance Minister Nirmala Sitharaman, notified taxation on salted and caramelised popcorn. Amid huge discussions, there are speculations around how much tax people must pay on the snack while purchasing it in movie theatres.
How much tax will be imposed on popcorn sold in movie theatres?
Popcorn is generally sold in loose form in movie theatres, hence they will attract a lower GST rate compared to salted and caramelised popcorns sold in packet.
Popcorn, in loose form, sold in movie theatres will continue to attract GST at a 5 per cent rate, same as in restaurants, government sources told Press Trust of India.
Tax on popcorn in movie theatres can be different if the snack has been purchased along with a movie ticket. According to the news agency, if the popcorn is clubbed and sold together with a movie ticket, the supply would be treated as a composite supply and taxed as per the applicable rate of the principal supply, which is the ticket.
GST on salted and caramelised popcorns
The 55th meeting of the GST Council clarified the GST applicability in popcorn after it received a request from Uttar Pradesh to clarify the classification and GST rate applicable to popcorn mixed with salt and spices. There has been no increase in the GST rate on popcorn, reported PTI.
