Understanding Goods and Services Tax on Popcorn in India

Learning about the Goods and Services Tax (GST) applied to popcorn in India is crucial for both regulatory compliance and accurate pricing. Recent directives from the 56th GST Council have established a uniform 5% GST rate across all popcorn varieties. This article delves into the current GST rates for popcorn, its Harmonized System of Nomenclature (HSN) codes, and how recent government notifications impact both businesses and consumers.

GST Rate on Popcorn

The Goods and Services Tax (GST) rate for popcorn has been standardized at 5%. This uniform rate now applies to all popcorn types, including loose unbranded popcorn, pre-packaged savory varieties like butter and cheese popcorn, and ready-to-eat options such as caramel popcorn, which is categorized as a sugar confectionery item. This change in the GST rate was officially announced via CGST Rate Notification no. 09/2025 on September 17, 2025.

GST Classification of Popcorn

The Harmonized System of Nomenclature (HSN) provides a framework for classifying popcorn based on its processing methods.

• HSN 1005 / 1104: This category encompasses raw corn or maize. Raw corn is exempt from GST since it falls under agricultural produce.
• HSN 2106: This code covers processed, ready-to-eat popcorn not categorized as confectionery. Most savory popcorn types, such as salted or buttered, fall under this HSN code and have been subject to a 5% GST rate since September 22, 2025. Previously, the rate was 12%.
• HSN 1704: Popcorn coated with sugar-based syrups, like caramel popcorn, is classified here, under 'Sugar Confectionery.' Products within this HSN code have also attracted a 5% GST rate since September 22, 2025, down from the earlier 18%.

This classification scheme helps distinguish between unbranded snacks, which may qualify for exemptions or lower tax rates, and branded snacks that might incur higher GST.

GST on Popcorn Sold in Different Locations

The location and method of popcorn sale directly influence the applicable GST rate:

• Theatres and Multiplexes: Popcorn sold in these venues often comes in branded packaging with various flavors. Savory options like salted or cheese popcorn are subject to a 5% GST. However, confectionery varieties, such as caramel popcorn, are now subject to an 18% GST slab as of September 22, 2025.
• Street Vendors: Loose, unbranded popcorn sold by street vendors generally attracts a 5% GST.

It is important to understand that the GST on popcorn in India primarily depends on how the product is presented to the consumer rather than just the place of sale.

Input Tax Credit (ITC) on Popcorn

Businesses are eligible to claim Input Tax Credit (ITC) on the procurement of raw materials and other inputs. The availability of ITC significantly impacts the cost efficiency for popcorn businesses. Manufacturers should assess their tax planning strategies alongside pricing to determine if input tax credits effectively offset output tax costs.

Exemptions and Special Cases

Certain popcorn sales may qualify for tax exemptions or special conditions, which can enhance their market competitiveness:

• Raw Agricultural Produce: Raw corn and maize are classified as agricultural products and are entirely exempt from GST.
• Homemade and Unbranded Popcorn: Homemade popcorn and loose, unbranded popcorn are subject to a 5% GST rate.
• Composition Scheme for Small Sellers: Small popcorn sellers with limited turnover can opt for the composition scheme, which simplifies the tax filing process. However, businesses participating in this scheme forgo the ability to claim input tax credits.

Accurate reporting necessitates that businesses are fully aware of popcorn classification and its corresponding GST rates.