Ready-to-eat popcorn will attract 18 percent Goods and Services Tax (GST), one more state-level bench — Telangana GST Authority of Advanced Ruling (AAR) – recently clarified.
In a recent ruling in the case of Agro Tech Foods Ltd, the Telangana Authority of Advanced Ruling observed that the company “is in the business of selling among other commodities ready-to-eat popcorn. These popcorn are usually flavoured with salt or caramel or strawberry or chocolate or kettled popcorn without any flavour. By own admission, the applicant submits that the popcorn is basically prepared by swelling of maize corn. This product is classified under tariff heading 1904”, so the GST levy would be 18 percent.
It also said that the applicant Agro Tech Foods Limited is selling readymade popcorn. According to it, ready to eat popcorn is obtained by popping the maize corn by using heating process which are subsequently coated with the palmolene oil, salt natural or artificial flavouring and spices, the ruling said.
“Heading 1904 includes prepared foods obtained by swelling or roasting of cereals or cereal products are covered under Tariff Heading 1904. Thus, the popcorn being manufactured by the applicant by using the process of swelling by heating would merit classification under Heading 1904. That the same classification has been confirmed by the Courts in India and overseas,” it said.
However that, in certain cases, ready-to-eat popcorn has also been held to be classified under Tariff Heading 2008 i.e., ‘Fruit, Nuts and Other edible parts of plants, otherwise prepared or preserved, whether or not containing added sugar or other sweetening matter or spirit, not elsewhere specified or included’, it added.
Before this ruling, the Gujarat Authority of Advanced Ruling had ruled in the case of Jay Jalaram Enterprises, a Surat-based puffed corn manufacturer, that GST rate for ready-to-eat popcorn would be 18 percent.
