Recently, the issue of GST on popcorn came into the limelight in the 55th meeting of the GST Council. In the meeting, it was said that the price of popcorn will be decided according to its flavour and packaging. It was told that 5 percent tax will be levied on ready-to-eat popcorn, 12 percent tax will be levied on pre-packaged popcorn and 18 percent GST will be levied on caramel popcorn.
Along with this, it was decided to increase the GST rate on beverages to 35 percent. However, the old rate of GST i.e. 5 percent will remain applicable on popcorn sold openly in cinemas. The reason for imposing higher tax on caramelized popcorn is that it is classified as sugar confectionery.
This much is the GST on these food items
Generally, food in movie theatres is more expensive than tickets, because multiplexes get 35 percent of their earnings from here. Apart from popcorn and beverages, the rest of the food items available in cinemas like popcorn, burger, samosa, sandwich, nachos were earlier charged 18% GST, which was reduced to 5% in 2023. That is, except popcorn and beverages, consuming these food items in cinemas will be less heavy on the pocket.
Taking combo can be costly
One should avoid buying combo packs in movie theaters as it is brought under the purview of composite supply. That is, the product and service are offered together and both are taxed separately. Even though the tax on other food items has been reduced to 5%, but if you take it with the movie ticket, you will not get the benefit of 5% discount. Then this food item will be taxed at the rate of 18%. Overall, if you are going to enjoy your favorite movie at the theaters, then it is important to spend on food and drinks with a little more prudence.
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