New GST Rate on Cold Drinks and Aerated Beverages
Quick Summary
The new GST rate for aerated drinks and energy drinks in India is now 40%, replacing the previous 28% GST plus 12% compensation cess.
Non-aerated fruit juices have a lower GST rate of 5%, unchanged from before.
The change in GST rates aims to discourage the consumption of sugary, non-essential drinks by making them more expensive.
Restaurants charge an 18% GST on cold drinks served as part of a composite supply.
Businesses can claim Input Tax Credit (ITC) on expenses related to the sale of taxable beverages.
Cold drinks are a favorite refreshment for millions across India, especially during summer. But behind every bottle of soda or fruit-based cooler is a high tax tag. In this guide, we break down the cold drink hsn code and gst rate, its impact on pricing, and how it affects both consumers and sellers.
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GST on Cold Drinks & Aerated Beverages in India
The Government of India is updating GST rates effective after 22 September 2025. Under the revised GST structure, cold drinks and aerated beverages fall under a special 40% GST slab, replacing the earlier system of 28% GST plus 12% compensation cess.
Most fizzy and sweetened beverages are considered non-essential or “sin goods”, which is why they attract a higher tax rate. In contrast, natural fruit juices without carbonation are taxed at a lower rate of 5%.
New GST Rate on Cold Drinks and Beverages
| Type of Beverage | HSN Code | GST Rate (After 22 Sept 2025) |
Old GST + Cess (Before 22 Sept 2025) |
Total Old Tax |
|---|---|---|---|---|
| Aerated drinks (colas, sodas) | 2202 | 40% (special slab) | 28% + 12% Compensation Cess | 40% |
| Carbonated fruit beverages (fruit-pulp based with fizz) | 2202 | 40% (special slab) | 28% + 12% Compensation Cess | 40% |
| Non-aerated fruit juices (100% juice / natural) | 2009 | 5% | 12% | 12% |
| Energy drinks (carbonated) | 2202 | 40% (special slab) | 28% + 12% Compensation Cess | 40% |
Key update:
The earlier 28% GST + 12% compensation cess on aerated drinks is now consolidated into a single 40% GST slab.
Natural fruit juices without carbonation now fall under the 5% GST slab.
No separate compensation cess applies under the revised structure.
(After 22 Sept 2025) 40% (special slab)
(Before 22 Sept 2025) 28% + 12% Compensation Cess
Tax 40%
(After 22 Sept 2025) 40% (special slab)
(Before 22 Sept 2025) 28% + 12% Compensation Cess
Tax 40%
(After 22 Sept 2025) 5%
(Before 22 Sept 2025) 12%
Tax 12%
(After 22 Sept 2025) 40% (special slab)
(Before 22 Sept 2025) 28% + 12% Compensation Cess
Tax 40%
What Qualifies as Cold Drinks Under GST?
Under GST, cold drinks and aerated beverages include:
Carbonated soft drinks (cola, lemon soda, orange soda)
Flavoured sparkling water
Sweetened beverages with carbonation
Carbonated energy drinks
These products fall under HSN Code 2202 and are taxed at the 40% GST slab.
GST on Other Beverage Categories
Some beverages fall under different GST slabs depending on their composition:
| Beverage Type | GST Rate |
|---|---|
| Natural fruit juice (non-carbonated) | 5% |
| Packaged coconut water (unsweetened) | 5% |
| Flavoured milk or lassi | 5% |
| Carbonated energy drinks | 40% |
GST on Cold Drinks: Old vs. New Rates Explained (40% vs 5%)
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How to Calculate GST on Cold Drinks
Cold drinks and aerated beverages in India generally fall under the 40% GST slab under the revised structure. Calculating GST on these beverages is straightforward once you know the base price and the applicable GST rate.
GST Calculation Formula: Final Price = Product Price + GST Amount
Suppose a soft drink has a base price of ₹100.
- GST Rate = 40%
- GST Amount = ₹100 × 40% = ₹40
Final Price = ₹100 + ₹40 = ₹140
Conclusion
The high gst rate on cold drinks and aerated beverages makes them one of the costliest items in the FMCG space, not because of the price tag, but due to taxes. Understanding how it works helps consumers spend wisely and helps sellers price correctly.
