The long debate over how popcorn should be taxed under the Goods and Services Tax (GST) has finally ended. In its 56th meeting held on Wednesday, the GST Council, chaired by Union Finance Minister Nirmala Sitharaman, approved a new and simplified tax structure for popcorn, effective from September 22.

Earlier, popcorn taxation was confusing. Loose salted popcorn was taxed at 5%, packaged salted popcorn at 12%, and caramel popcorn at 18%. This led to criticism and jokes across social media. Now, the Council has removed these multiple slabs and simplified the system.

Going forward, salted or spiced popcorn, whether sold loose or packaged, will attract a flat 5% GST. Caramel popcorn, because it contains sugar and is considered confectionery, will remain under the 18% slab. This means the only difference is whether sugar is added or not.

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Photograph: (X)

The Council also took a major decision on the overall GST slabs. India will now move from a four-rate structure of 5%, 12%, 18% and 28% to just two main slabs of 5% and 18%. To balance this, a new 40% tax slab has been created for “sin and luxury goods” such as tobacco, bidi, pan masala, energy drinks, high-end cars, yachts, private aircraft, IPL tickets and online gaming.

Consumers are expected to benefit immediately from these reforms. Daily-use items like UHT milk, paneer, butter, cheese, biscuits, juices and dry fruits will now fall in the 5% or zero-tax category. Even services such as gyms, salons, yoga centres and barbers, earlier taxed at 18%, will now attract just 5% GST. Health and life insurance have been completely exempted, providing relief to the middle class.

Some earlier confusions have also been cleared. For example, cream buns were previously taxed at 18% as pastries, while buns and cream separately attracted 5%. Now, cream buns too will fall under the 5% slab.
Social media had its own fun with the popcorn debate. Many users posted memes asking whether caramel popcorn would be taxed at 5%, 18%, 20% or even 40%. With the new decision, such doubts have been cleared, bringing relief to both sellers and buyers.