GST on Popcorn: Tax Rates, Exemptions and Classification

Learning about the GST on popcorn in India is important for both tax compliance and accurate pricing. New recommendations from the 56th GST Council now have notified a standard 5% GST rate for all popcorn types. 

This article explains the GST rate on popcorn, the HSN codes and the effects of recent government circulars on both businesses and consumers.

Key Takeaways

• The 56th GST Council meeting has announced and CBIC notified a common 5% GST rate for all types of popcorn with effective from 22nd September 2025, including salted, spiced, and caramel.

GST Rate on Popcorn

The GST on popcorn depends significantly on how the product is sold. All types of popcorn attract 5% GST rate for loose unbranded popcorn, pre-packaged butter and cheese popcorn and ready-to-eat popcorn that is fully coated, such as caramel popcorn, is classified as a sugar confectionery item. The change in GST rate took place vide CGST Rate Notification no. 09/2025 dated 17th September 2025.

GST Classification of Popcorn

The Harmonized System of Nomenclature (HSN) uses categories that determine popcorn classification according to processing methods.

• HSN 1005 / 1104: Includes raw corn or maize. Raw corn does not fall under GST taxation since it belongs to the agricultural product category.
• HSN 2106: Covers ready-to-eat, processed popcorn that is not classifiable as confectionery. This HSN code applies to most savoury flavoured popcorn (like salted or buttered), which attracts a 5% GST rate since 22nd September 2025. Earlier it attracted 12%.
• HSN 1704: Popcorn coated with sugar-based syrups, like caramel popcorn, is classified under this heading, which covers ‘Sugar Confectionery’. Products falling under this HSN code attract a GST rate of 5% since 22nd September 2025. Earlier it attracted 18%.

The classification system differentiates between unbranded snacks that qualify for exemption or low-tax status while the branded snack attracts higher GST rates.

GST on Popcorn Sold in Different Locations

Where and how popcorn is sold has a direct bearing on the applicable GST rate on popcorn:

• Theatres and multiplexes serve popcorn with branded packaging and flavouring. Therefore, savory popcorn like salted or cheese-flavored snacks attract 5% GST. However, confectionery varieties like caramel popcorn now fall under the 18% GST slab since 22nd September 2025.
• The tax rate for loose, unbranded popcorn distributed by street vendors attracts 5% GST.

It’s important to note that the GST on popcorn in India is less about the place of sale and more about how the product is presented to the consumer.

Input Tax Credit (ITC) on Popcorn

Businesses can obtain ITC for all expenses on raw materials and purchasing inputs. The availability of ITC directly affects the cost efficiency of popcorn businesses.

Popcorn manufacturers should evaluate tax planning against pricing strategies by determining if Input Tax Credits exceed the cost of output tax.

Exemptions and Special Cases

Some popcorn sales qualify for tax exemptions or special conditions that can improve their market potential.

• Raw corn and maize belong to the agricultural category, so they receive full GST exemption.
• A 5% GST rate applies to homemade popcorn and loose popcorn that is not branded or packaged.
• Small popcorn sellers with limited turnover levels can participate in the composition scheme. The tax filing process becomes easier under this scheme but sellers lose access to input tax credits.

It is important for businesses to know the classification and GST rate of popcorn for accurate reporting.