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. The rate to apply depends on how the product is sold - loose, in packages or as a value-added confectionery. New recommendations from the GST Council now mean that coated varieties such as caramel popcorn have a different rate from other popcorn.

This article explains the GST rate on popcorn, including the tax rates (5%, 12% and 18%), the HSN codes and the effects of recent government circulars on both businesses and consumers.

GST Rates on Popcorn

The GST on popcorn depends significantly on how the product is sold. The existing taxation system divides popcorn products according to their branding status, packaging methods, and flavor modifications.

• 5% GST: Loose unbranded popcorn falls under the 5% GST category. The GST classification applies to loose popcorn that vendors sell without marketing or packaging materials.
• 12% GST: The GST tax rate becomes 12% when popcorn vendors offer pre-packaged products with branding and savoury flavour additions. Butter and cheese popcorn represent typical flavoured varieties that belong to this tax bracket.
• 18% GST: A recent clarification has placed certain types of popcorn in a higher tax bracket. As per the latest circulars, ready-to-eat popcorn that is fully coated, such as caramel popcorn, is classified as a sugar confectionery item. Consequently, it attracts an 18% GST rate.

For example, unpackaged popcorn bought from local stores or carts in small towns and by the roadside falls under the 5% GST category. The tax rate for branded popcorn products sold in sealed packages or served at commercial venues such as cinemas stands at 12%.

The government uses distinct GST rates to preserve lower taxes for unbranded food products while charging higher taxes to branded items with added value.

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 12% GST rate.
• HSN 1704: As clarified by CBIC Circular No. 247/04/2025-GST, 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 higher GST rate of 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 12% GST. However, confectionery varieties like caramel popcorn now fall under the 18% GST slab.
• 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.

• A 12% or 18% GST rate applies to popcorn businesses selling packaged, branded, or flavored popcorn products, including caramel popcorn, which allows them to claim ITC for their raw materials, packaging materials, transport expenses, and equipment.
• The 5% GST category does not grant ITC benefits to sellers who sell unbranded or loose popcorn products.

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.

GST Council Clarifications

To address industry questions, the Central Board of Indirect Taxes and Customs (CBIC) issued Circular No. 247/04/2025-GST, providing clear guidelines on the taxation of ready-to-eat and flavoured popcorn. The circular clarified that while regularly flavoured popcorn falls under a lower slab, popcorn that is fully coated with syrups (like caramel popcorn) is classified as a confectionery item.

This circular establishes that such products fall under HSN Code 1704 and are subject to 18% GST. This brings clarity to tax applications by defining the distinction between simply processed corn products and value-added confectionery items. As a result, the GST on caramel popcorn is clearly fixed at 18%, regardless of the location of sale.

The tax on popcorn in India is set according to rules that treat basic foods differently from processed, enhanced products. Unbranded, loose popcorn is taxed at 5% GST, but packaged and flavoured brands are taxed at 12%. Nevertheless, after recent updates, caramel popcorn and similar confectionery are now considered sugar confectionery and are charged 18% GST.

It is important for businesses to know the classification and GST rate of popcorn to follow the rules.