The Popcorn Puzzle: New GST Rates Make Salt And Sugar Distinction To Define Tax Structure

The announcement on two different taxes for different kinds of popcorn had not only drawn a lot of flak but also been the stuff of memes. The Goods and Services Tax (GST) Council, chaired by Union Finance Minister Nirmala Sitharaman, has now resolved the long-standing confusion over how popcorn should be taxed, according to a recent report by NDTV. At its 56th meeting, the Council decided on a uniform five per cent GST rate for all salted or spiced popcorn, whether sold loose or in packets. The new rate will apply from September 22, 2025.

Until now, loose salted popcorn attracted five per cent GST, while packaged salted popcorn was taxed at 12 per cent, creating ambiguity and frequent disputes. Caramel popcorn will attract an 18 per cent tax since the addition of sugar places it in the confectionery category. In effect, the distinction in taxation now comes down to whether or not sugar is used in the product.

Part Of Wider Rationalisation

The popcorn decision is part of a broader push to simplify GST rates and make compliance easier for both businesses and consumers. The Council announced that GST will now primarily operate on two slabs—five per cent and 18 per cent.

Basic food products such as milk, paneer, butter, cheese, biscuits, and fruit juices will come under the five per cent slab. On the services side, gyms, salons, and yoga centres—previously taxed at 18 per cent—will also move to the five per cent category. In a significant relief, health and life insurance premiums have been exempted from GST altogether.

Luxury And Sin Goods At 40 Per Cent

Alongside rationalisation at the lower end, the Council has created a new 40 per cent tax rate for luxury and sin goods. This category includes tobacco products, energy drinks, high-end cars, yachts, private aircraft, Indian Premier League tickets, and online gaming. The government hopes the higher rate will discourage excess consumption while also boosting revenue.

Public Reactions

For years, social media users have poked fun at the uneven tax treatment of loose and packaged popcorn. The latest change suggests the government is moving toward a simpler, more consistent approach.

Expected Impact

For small shopkeepers, the shift means they won’t have to juggle two different tax rates when selling popcorn in different forms. For consumers, the uniform five per cent rate may translate into marginally lower prices, especially for packaged products that earlier attracted a higher tax. So, at your next outing at the movie theatre, you can enjoy your popcorn without having to do the complex math!