New GST on Coffee: Tax Rate on Instant, Filter, and Roasted Coffee

Coffee is more than just a beverage—it’s a habit, a business, and even a global commodity. In India, coffee lovers enjoy it in many forms: ground, roasted, filter, or instant. But do you know how much tax you’re paying on your daily cup? This blog breaks down the gst on coffee, covering everything from raw beans to instant packs.

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    New GST Rate on Coffee in India

    The Government of India is updating GST rates effective after 22 Sep 2025. Below are the expected new GST rates for coffee (no compensation cess).

    Coffee Categories Under New GST

    Coffee Type HSN Code New GST Rate
    Raw coffee beans (unprocessed) 0901 0% (Exempt)
    Roasted coffee beans 0901 5%
    Coffee powder (not instant) 0901 5%
    Instant coffee (spray/dried) 2101 18%
    Coffee substitutes (chicory mix) 2101 18%

    Coffee Categories Under Old GST

    (Old GST Rates – Applicable Until 21st September)

    The GST Council has classified coffee based on its form and processing level. Each type carries a different GST rate depending on how ready it is for consumption.

    Coffee Type HSN Code GST Rate
    Raw coffee beans (unprocessed) 0901 0% (Exempt)
    Roasted coffee beans 0901 5%
    Coffee powder (not instant) 0901 5%
    Instant coffee (spray/dried) 2101 18%
    Coffee substitutes (chicory mix) 2101 18%

    Coffee Powder GST Rate

    Regular filter or ground coffee used for home brewing falls under HSN code 0901. The coffee powder gst rate is 5% and applies to:

    • Filter coffee powder
    • Roasted & ground beans
    • Non-instant varieties

    GST Rate on Instant Coffee

    Instant coffee, including spray-dried or freeze-dried varieties, undergoes heavy processing and packaging. Hence, it attracts a higher tax.

    The gst rate on instant coffee is 18%, under HSN code 2101. Applies to:

    • Instant coffee sachets and jars
    • Coffee-chicory mix
    • Ready-to-mix coffee powder

    GST Input Tax Credit for Coffee Businesses

    If you’re in the business of trading, processing, or serving coffee (e.g., café, distributor, manufacturer), you may be eligible to  claim Input Tax Credit  on:

    • Packaging materials
    • Equipment (grinders, roasters)
    • Marketing services
    • Logistics and delivery costs

    GST Compliance Tips for Coffee Traders

    • Use correct  HSN Code  (0901 for roasted/ground, 2101 for instant)
    • Charge appropriate GST rates: 5% or 18%
    • File  GST returns  regularly
    • Maintain separate records for 0%, 5%, and 18% categories

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    Conclusion

    Whether you’re a coffee lover or run a coffee business, understanding the gst on coffee helps in better cost planning and compliance. From bean to brew, the tax rate changes with how your coffee is prepared.

    Apurva Maheshwari
    Chartered Accountant
    MRN No.: 445615
    City: Agra

    I am a Chartered Accountant with 5 years of experience specializing in GST, income tax, and HSN code classification. I help businesses with GST compliance, tax planning, and financial advisory, ensuring they meet regulatory requirements while optimizing their tax strategies. I aim to simplify GST filings, income tax laws, and HSN code classifications, helping professionals and business owners stay informed and compliant.

    Frequently Asked Questions

    • What is the GST on coffee in India?
      It ranges from 0% to 18% depending on the type:
      • Raw beans: 0%
      • Roasted/ground coffee: 5%
      • Instant coffee: 18%
    • What is the coffee powder GST rate?
      5% on roasted and ground coffee powder, not instant.
    • What is the GST rate on instant coffee?
      18%, classified as processed food.
    • Can a coffee café claim GST Input Tax Credit?
      Yes, cafés and coffee businesses can claim ITC on all purchases related to their taxable sales.
    • Is chicory coffee mix also taxed at 18%?
      Yes. Coffee substitutes and chicory blends fall under HSN 2101 and attract 18% GST.