Order to Impose 18 Per Cent GST on Popcorn after Paratha

The Gujarat Bench of the Authority of Advanced Ruling (AAR) has said that in order to make ready-to-eat popcorn, corn grains are heated and mixed with other ingredients such as salt, so it will take 18% GST.

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After imposing 18 per cent GST on Malabar Paratha in Karnataka, it has now come to Gujarat to give 18 per cent GST on popcorn. Like paratha, this time it has become a topic of discussion in social media.

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In Gujarat, the Tax Affairs Authority of Advance Ruling (AAR) has clarified that GST will be levied at 18 per cent on packed ready to eat popcorn.

What did the authority say?

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AAR has said in its order that the humble packed popcorn does not come under standard grain. There is oil in it and it is cooked in a way. It is not like popcorn that is roasted in the microwave and eaten. Therefore, it will attract 18 per cent GST. Significantly, the Modi government implemented GST under the concept of One Nation, One Tax, but there are lots of differences or confusion on many rules.

18% GST was imposed on the paratha

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Earlier in Karnataka, an authority had ordered that 5% GST would be imposed on roti, but 18% GST would be imposed on Malabar Paratha. Its people had a lot of fun on social media.

This order states that there is a difference between roti and paratha, hence only 5 per cent Goods and Services Tax (GST) will be imposed on roti, but on paratha it will be 18 per cent.

This decision of the Gujarat bench of AAR was made during the hearing of the petition of Jai Jalaram Enterprise, a Surat-based company making popcorn. Let us tell you that recently a company from Karnataka had filed a petition in which parathas should also be kept in the range of khakhara, chapati or roti and only 5% GST should be taken.

What's the matter?

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A company sells popcorn in a plastic closed pack under the registered brand name. The company had started its stand that these are normal maize grains which fall in the category of grains, so it should be imposed at 5% GST.

The Gujarat Bench of AAR has given this decision based on the previous decisions of the Supreme Court in the Central Sales Tax Act. The application company argued that despite heating the corn grains, its basic properties do not change. Also, oil, salt and turmeric are used in very small amounts in it. But in this case, the AAR believed that after roasting popcorn falls into the ready-to-eat category, it should attract 18 per cent GST.