GST 2.0 | Salted Vs Caramelised: Here’s what your next popcorn bucket might cost you now

After the GST Council approved historical changes to India's indirect tax structure, several daily-use goods will become cheaper from September 22. The long-running debate over how popcorn should be taxed under the Goods and Services Tax (GST) has finally been settled. 

At its 56th meeting, which was held on Wednesday and concluded on Thursday, the GST Council, chaired by Union Finance Minister Nirmala Sitharaman, approved a simplified tax structure for popcorn that will come into effect later this month on September 22.

Also Read: As consumers cheer GST 2.0 Diwali gift, a quick take on items set to become more expensive 

GST 2.0| Popcorn finally gets tax clarity

Under the new regime, salted or spiced popcorn will attract a 5 per cent GST, whether sold loose or pre-packed and labelled. Caramel popcorn, however, will be taxed at 18 per cent since it falls under the category of sugar confectionery.

The older structure had drawn criticism for its inconsistency--5 per cent GST on loose salted popcorn, 12 per cent when pre-packaged, and 18 per cent for caramel variants. The latest change simplifies this anomaly by differentiating only on the basis of sugar content.

Cream buns no longer a 'pastry' problem

A similar dispute had earlier erupted over cream buns. Until now, they were taxed at 18 per cent as pastries, while buns and cream separately attracted just 5 per cent. Following the latest changes, pastries--including cream buns--will now fall under the 5 per cent slab, bringing uniformity and relief to the bakery industry.

Also Read: GST 2.0: A look at the industry leaders' reactions from different sectors to new GST rate reforms  

GST2.0| Wider GST restructuring

One of the most significant announcements was the rationalisation of GST slabs. The Council has decided to move from four primary rates-5 per cent, 12 per cent, 18 per cent, and 28 per cent--to just two slabs of 5 per cent and 18 per cent.

Consumers will see immediate benefits across a wide range of essentials, including UHT milk, paneer, butter, cheese, biscuits, juices, and dry fruits, many of which are now in the 5 per cent or zero-tax category. Everyday services such as gyms, salons, yoga centres, and barbers, previously taxed at 18 per cent, will now also attract just 5 per cent GST.

Also Read: GST Cuts for Auto: M&M, Maruti, TaMo, Hero, other major winners as Council reduces tax to 18%  

GST 2.0| Relief for middle class, big hit on luxury

Health and life insurance policies have been exempted from GST, offering direct relief to the middle class. Automobiles, including small cars, motorcycles below 350cc, and electric vehicles, have also been brought under lower slabs to boost demand.

At the other end of the spectrum, the Council introduced a steep 40 per cent levy on “sin and luxury goods” such as tobacco, pan masala, energy drinks, high-end vehicles, yachts, and private aircraft. Even IPL tickets and online gaming have been placed in this highest slab.