GST on caramel popcorn sold in theatres to stay at 5%, govt clarifies

Separately, on the hike in GST rate on all old vehicles and used electric vehicles (EVs) from 12 per cent to 18 per cent

Amid outrage in the social media over 18 per cent Goods and Services Tax (GST) on caramelised popcorn, government sources on Tuesday clarified that popcorn served in theatres will continue to be charged at 5 per cent.

 

“Generally, Popcorn is served to customers in theatres in loose form and hence will continue to attract a rate of 5 per cent as applicable to ‘restaurant service’ as long as supplied independent of the cinema exhibition service,” official sources privy to the matter said, requesting anonymity.

 

“There has been no increase in the GST rate on popcorns in the recently held GST Council meeting. A request was received from the State of Uttar Pradesh to clarify the classification and GST rate applicable on popcorn mixed with salt and spices. This issue was taken to the 55th GST Council and the Council recommended to clarify the same,” sources said.

 

Separately on the hike in GST rate on old and used electric vehicles from 12 per cent to 18 per cent, sources in the know said that this was done as part of a simplification effort.

 

“As a measure of simplification, the Council recommended to unify and prescribe a single rate of GST on the sale of all old and used vehicles including EVs at 18 per cent which was leviable at different rates earlier," government sources said. Importantly, they clarified that the Council has not recommended any "no new taxes" on these transactions.