In the recently held 55th meeting of the GST Council, major decisions were taken regarding GST on popcorn and beverages. The price of popcorn will now be decided on the basis of its flavor and packaging. The Council stated that:
- Ready-to-eat popcorn will attract 5% GST.
- 12% GST will be applicable on pre-packaged popcorn.
- Caramel popcorn will be subject to 18% GST.
As before, only 5% GST will be applicable on popcorn opened in theaters. At the same time, the GST rate on beverages has been increased to 35%.
Why higher tax on caramel popcorn?
The higher tax on caramelized popcorn is due to it being classified as a sugary confectionery.
- Due to this classification, it is included in the tax slab like other sweets and sugar products.
GST rates on food items in cinemas
GST on food items in multiplexes and movie theaters has already been a topic of discussion.
- In 2023, the 18% GST on food items like popcorn, burgers, samosas, sandwiches, and nachos was reduced to 5%.
- However, popcorn and beverages have been kept out of this change.
Major part of multiplex’s earnings
- Food in theaters is more expensive than tickets.
- Multiplexes earn 35% of their earnings from food items.
Tax effect on combo pack
Those purchasing combo packs at movie theaters may have to spend extra.
- Combo pack has been placed under composite supply, in which the product and service are taxed separately.
- If a food item is purchased along with a movie ticket, it will attract 18% GST, even though individual food items attract 5% GST.
What to do?
- Buy movie tickets and food items separately.
- With this you will get the benefit of 5% tax exemption.
Tips for spending on food in theaters
- Avoid combo packs: These can be heavy on the pocket.
- Make separate purchases of food: Buying food along with movie tickets may result in higher taxes.
- Choose loose popcorn: Loose popcorn comes under 5% GST rate, while packaged options are expensive.
