Amid outrage, govt says caramelised popcorn to stay at 5% GST in theatres

Change in sale of old EVs a simplification measure

Amid outrage in the social media over 18 per cent goods and services tax (GST) on caramelised popcorn, sources on Tuesday clarified that popcorn served in theatres will continue to attract 5 per cent GST. 

“Generally, popcorn is served to customers in theatres in loose form and hence will continue to attract a rate of 5 per cent as applicable to ‘restaurant service’ as long as supplied independent of the cinema exhibition service,” sources privy to the matter said. “There has been no increase in the GST rate on popcorns in the recently held GST Council meeting.  A request was received from Uttar Pradesh to clarify the classification and GST rate applicable on popcorn mixed with salt and spices. This issue was taken to the 55th GST Council and the council recommended to clarify the same,” the sources said.  

Separately, on the hike in GST rate on all old vehicles and used electric vehicles (EVs) from 12 per cent to 18 per cent, sources said this was done as part of a simplification effort. 

“As a measure of simplification, the council recommended to unify and prescribe a single rate of GST on the sale of all old and used vehicles, including EVs, at 18 per cent which was leviable at different rates earlier,” sources said. 

They clarified that the council has not recommended any “no new taxes” on these transactions.  Only registered persons, such as businesses engaged in buying and selling of old and used EVs, are liable to pay GST at 18 per cent. Individual sales between private parties, such as one individual selling an old EV to another, will not attract GST. Also, the GST will be applicable only on the “margin” (difference between the selling price and value of the depreciated price) of the supplier.  

“When a registered person claims depreciation under the Income Tax Act, GST is due on the difference between the selling price and the depreciated value of the vehicle. If this margin is negative, no GST is payable,” the sources added.     “This solution strikes a balance between revenue generation and promoting EV adoption by keeping private sales tax free, while ensuring equity across vehicle types. It aligns with the government’s vision of sustainable mobility”, said Abhishek A Rastogi, founder, Rastogi Chambers.