New GST on Coffee: Tax Rate on Instant, Filter, and Roasted Coffee
- Raw coffee beans in India are exempt from GST, while roasted beans and non-instant coffee powder have a 5% GST rate.
- Instant coffee and coffee substitutes like chicory mixes are taxed at 18% GST due to their processing level.
- Businesses dealing in coffee can claim Input Tax Credit on items like packaging, equipment, and logistics.
- Correct HSN codes must be used for GST compliance: 0901 for roasted/ground coffee and 2101 for instant coffee.
- Coffee traders should maintain separate records for different GST categories and file returns regularly.
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.
Experience the power of Expert Accounting
Join our guided walkthrough to see how BUSY can transform your business operations.
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 Type
HSN Code
New GST Rate
Coffee Type
HSN Code
New GST Rate
Coffee Type
HSN Code
New GST Rate
Coffee Type
HSN Code
New GST Rate
Coffee Type
HSN Code
New GST Rate
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 Type
HSN Code
GST Rate
Coffee Type
HSN Code
GST Rate
Coffee Type
HSN Code
GST Rate
Coffee Type
HSN Code
GST Rate
Coffee Type
HSN Code
GST Rate
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
Get a Free Trial – Best GST Accounting Software For Small Business
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.
