GST on Beverages: Rates, HSN Codes, and Exemptions Explained

GST on beverages is determined by the type of drink and its HSN classification, with revised rates ranging from 0% to 40% effective from 22 September 2025.

The beverages GST structure post-22 September 2025 broadly includes:

• 0% GST: Specified plain drinking water, including qualifying water under HSN 2201, and specified plain milk products covered by the exemption schedule.
• 5% GST: Specified fruit pulp or fruit juice-based drinks and milk-based beverages covered under the revised tariff entries.
• 18% GST: Certain beverages that remain within the standard GST schedule and do not qualify for the concessional or higher-rate entries.
• 40% GST: Other specified non-alcoholic beverages under HSN 2202, including caffeinated beverages and specified carbonated/sweetened beverages.

The GST rate on cold beverages depends on the product's exact HSN classification, after 22 September 2025, specified carbonated and caffeinated beverages attract 40%, while qualifying fruit- and milk-based beverages can attract 5%. For GST on cold drinks India, classification by ingredients and product formulation remains important because not every beverage under HSN 2202 has the same rate. The HSN code beverages GST rate must therefore be checked against the applicable tariff entry.

The earlier 28% GST plus 12% Compensation Cess treatment for specified high-rate beverages has been replaced by a 40% GST slab under the revised structure; verify the exact tariff entry before invoicing.

Beverages exempt from GST are limited to products that meet the specific conditions in the applicable exemption notification, such as qualifying plain water, plain milk and specified natural beverages. Unlike carbonated drinks which attract 40% GST under specified HSN 2202 entries, these products receive nil-rate treatment only when their classification and conditions are satisfied.

Note: 0% GST applies only when the beverage meets the exact conditions of the relevant HSN and exemption entry. Packaged, branded, flavoured or processed versions can attract a different rate, so the precise tariff classification should be verified before filing.

The answer to how to calculate GST on beverage sales is to identify the correct HSN code, apply its GST rate to the taxable value, and add the resulting tax to the base price.

• Identify the HSN code: The HSN code beverages GST rate classification determines whether the applicable rate is 0%, 5%, 18%, or 40%.
• Determine the base price: Use the price before GST is added.
• Calculate GST: GST amount = Base price × (GST rate ÷ 100).
• Calculate the final price: Final price = Base price + GST amount.

Cola at 40% GST: Base price Rs. 100 → GST = Rs. 100 × 40% = Rs. 40 → Final price = Rs. 140.

Specified fruit juice-based beverage at 5% GST: Base price Rs. 100 → GST = Rs. 100 × 5% = Rs. 5 → Final price = Rs. 105.

For a GST-inclusive MRP, use the reverse formula: GST amount = MRP × GST rate ÷ (100 + GST Rate).

GST on beverages supplied as exports is generally treated as a zero-rated supply, allowing eligible exporters to claim a refund of unutilised ITC or export without payment of IGST under a valid Letter of Undertaking (LUT).

• HSN classification: The HSN code beverages GST rate classification declared on export documentation must accurately correspond with the product. Incorrect classification can create customs and compliance issues.
• Refund route: Eligible exporters can export under LUT without payment of IGST or, where applicable, export on payment of IGST and claim the corresponding refund.
• Alcoholic beverages: Beer, wine, and spirits for human consumption are outside the GST framework. Their export treatment involves applicable customs and other regulatory requirements rather than the domestic GST rate structure.

The exact HSN classification, export documentation, and refund route should be verified for the specific beverage before filing.