GST Classification and Tax Rate for Popcorn in Gujarat
The Appellate Authority for Advance Ruling confirmed that popcorn is classified under Tariff Item 1904 10 90, attracting an 18% GST rate.
- Ruling
- GUJ/GAAAR/APPEAL/2020/ dated 04.09.2020
- Authority
- Appellate Authority for Advance Ruling
This page was written by Patron Accounting’s AI from the official release and reviewed before publishing. It explains the document in plain language. It is not the document itself. Where this page and the original differ, the original governs.
The short version
- Popcorn is classified as prepared food obtained by roasting cereals.
- It does not fall under the specific entry for rice-based products.
- The product attracts the residual GST rate of 18%.
In short
The company asked the Gujarat Appellate Authority for Advance Ruling to clarify the correct GST classification and tax rate for their packaged popcorn. The dispute centered on whether the product qualified for a lower tax rate reserved for specific cereal-based snacks or the higher residual rate.
What has changed
How it worked before
Businesses were often uncertain whether popcorn should be taxed under specific entries for puffed snacks or as a general prepared food item, sometimes relying on older sales tax classifications.
What has changed
The authority ruled that popcorn must be classified under Tariff Item 1904 10 90. This means businesses manufacturing or selling similar popcorn products must apply the 18% GST rate, as it does not qualify for lower-taxed categories intended for rice-based snacks.
Who this affects
Manufacturers and distributors of packaged popcorn or similar roasted cereal snacks.
An example
A snack manufacturer in Maharashtra produces roasted corn popcorn and has been charging 5% GST, believing it falls under a lower-taxed snack category. After reading this ruling, they realize their product likely falls under the 18% category. They should consult with a tax professional to assess their specific risk and determine if they need to adjust their tax filings to avoid future penalties.
What you should do
If you sell popcorn, review your current GST classification against this ruling. Remember that an Advance Ruling is only legally binding for the business that requested it and their specific tax officer; it does not automatically change the law for your business.
If you do nothing
If you apply a lower tax rate than required, you risk a tax demand notice from your local GST officer. You may be required to pay the difference in tax, along with interest and potential penalties for incorrect reporting. Relying on a ruling that does not apply to you is not a valid legal defense during an audit.
The terms explained
- Harmonised System of Nomenclature (HSN)
- A standardized system of names and numbers used to classify traded products for tax and customs purposes.
- Residual entry
- A catch-all category in tax law used for items that do not fit into more specific, defined groups.
- Advance Ruling
- A formal decision provided by tax authorities to a business regarding the tax treatment of a specific transaction.
The ruling in detail
Appellate Authority for Advance Ruling
M/s. Jay Jalaram Enterprises
GUJ/GAAAR/APPEAL/2020/ dated 04.09.2020 · Gujarat
Questions before the authority
- Classification, under which Schedule / Sr. No. / Chapter heading / Sub heading/ Tariff Item (HSN) the rate of CGST / SGST would be applicable on the supply made by the applicant on [J.J.’s] Popcorn, vide Tax Invoice No.GT/411 Dt. 24-02-2018?
Facts
The appellant manufactures 'J.J.'s POPCORN' by heating raw corn grains in an electric machine at high temperatures until they puff. The resulting product is sieved, mixed with salt, edible oil, and turmeric powder, and packed in 15-gram plastic pouches. The appellant sought a ruling on the correct HSN classification and applicable GST rate for this product.
Ruling
| Question | What the authority ruled |
|---|---|
| Classification and GST rate for J.J.'s Popcorn | Classifiable under Tariff Item 1904 10 90, attracting 18% GST (9% CGST + 9% SGST) Falls under Sr. No. 15 of Schedule III of Notification No. 1/2017-Central Tax (Rate) |
The Appellate Authority confirmed the original ruling, holding that the product is classifiable under Tariff Item 1904 10 90. Consequently, it attracts GST at the rate applicable to the residual entry under Schedule III of the relevant notification.
Reasoning
The authority determined that the product fits the description of 'prepared foods obtained by the roasting of cereal' under Chapter Heading 1904. It rejected the appellant's contention that the product falls under Tariff Item 1904 10 20, reasoning that the expression 'and the like' in that entry is restricted to rice-based products under the principle of **noscitur a sociis**. Furthermore, it held that Chapter Note 1(A) and (B) of Chapter 10 excludes processed corn from being classified under Heading 1005. The authority also distinguished the appellant's cited case law, noting that the current classification is governed by the **Harmonised System of Nomenclature** under the GST regime.
Provisions relied on
- Chapter Heading 1904 of the Customs Tariff Act, 1975
- Chapter Heading 1005 of the Customs Tariff Act, 1975
- Notification No. 1/2017-Central Tax (Rate) dated 28.06.2017
- Notification No. 2/2017-Central Tax (Rate) dated 28.06.2017
- Section 100 of the CGST Act, 2017
For the practitioner
This ruling clarifies that popcorn manufactured by roasting corn is not covered by the specific entry for 'Paws, Mudi and the like' under Tariff Item 1904 10 20, which is limited to rice-based products. It confirms that such popcorn falls under the **residual Tariff Item 1904 10 90**, attracting a higher GST rate of 18%. Practitioners should note that the authority strictly applied the **Harmonised System of Nomenclature** and rejected the application of older Sales Tax era precedents.
Source
This is a summary prepared from the published order, which is a scanned document. It is a reading aid and not the authority: where the two differ, the order governs. Verify every provision against the original before relying on it.
Original order: https://www.gstcouncil.gov.in/sites/default/files/2024-02/guj_aaar_04_2020_jay_jalaram.pdf
Legibility of the scan, as read: high.
Prepared 13-10-2026.
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