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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Coffee Categories Under GST
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.
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 (FAQs)
- 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.
