New GST Rate on Cold Drinks and Aerated 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 drinks gst rate, its impact on pricing, and how it affects both consumers and sellers.
New GST Rate on Cold Drinks & Aerated Beverages in India
The Government of India is updating GST rates effective after 22 Sep 2025. Below are the expected new GST rates for common beverages (no compensation cess under the updated structure).
| Type of Beverage | HSN Code | New GST Rate | Compensation Cess | Total Tax |
|---|---|---|---|---|
| Aerated drinks (colas, sodas) | 2202 | 40% (special slab) | None | 40% |
| Carbonated fruit beverages (fruit-pulp based with fizz) | 2202 | 40% (special slab) | None | 40% |
| Non-aerated fruit juices (100% juice / natural) | 2009 | 5% | None | 5% |
| Energy drinks (carbonated) | 2202 | 40% (special slab) | None | 40% |
Note: Under the updated structure, legacy 28% + cess on fizzy/“sin” beverages is consolidated into a 40% special slab. Non-aerated juices remain at 5%.
GST on Cold Drinks: Old vs. New Rates Explained (40% vs 5%)
What Are Cold Drinks Under GST?
Under GST, cold drinks and aerated beverages include:
- Carbonated soft drinks (cola, lemon soda, orange soda, etc.)
- Flavored sparkling water
- Sweetened juices with carbonation
- Energy drinks with fizz
These are considered non-essential or luxury beverages and are taxed accordingly.
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Old GST Rate on Cold Drinks and Aerated Beverages
(Old GST Rates – Applicable Until 21st September)
| Type of Beverage | HSN Code | GST Rate | Compensation Cess | Total Tax |
|---|---|---|---|---|
| Aerated drinks (Coke, Pepsi, etc.) | 2202 | 28% | 12% | 40% |
| Fruit pulp-based cold drinks (with fizz) | 2202 | 28% | 12% | 40% |
| Non-aerated fruit juices (natural) | 2009 | 12% | None | 12% |
| Energy drinks (carbonated) | 2202 | 28% | 12% | 40% |
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Cool Drinks GST Rate: What Qualifies?
- cold drinks gst rate of 40% is applied when drinks are sweetened and carbonated.
- Natural juice without carbonation: 12% GST
- Packaged coconut water (unsweetened): 12%
- Flavored milk or lassi: 5%
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GST Impact on Consumers
Let’s say you buy a soft drink priced at ₹100 (pre-tax):
- GST @28% = ₹28
- Cess @12% = ₹12
- Total tax = ₹40
- Final price = ₹140
This high GST is intended to discourage excessive consumption of sugary, non-essential beverages, and also boost revenue for compensating state governments under the GST regime.
GST for Distributors and Retailers
- Charge 28% + 12% compensation cess
- Use HSN Code 2202 on invoices
- Claim ITC on packaging, transport, advertising, and raw materials
- Maintain clear sales records and file returns regularly
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.
Jagdish Prasad is a Chartered Accountant with over 5 years of experience. He helps people and businesses with GST, income tax, and HSN codes. Jagdish makes sure his clients follow all tax rules and save money the right way. He also enjoys writing simple articles to help others understand taxes and stay updated with the latest rules.
Frequently Asked Questions
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What is the GST rate on cold drinks?The cold drinks GST rate is 28% GST + 12% Compensation Cess, totaling 40% tax.
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Are fruit juices taxed at the same rate as cola?No. Natural or uncarbonated fruit juices attract 12% GST. Only sweetened carbonated drinks fall under 40%.
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Is there a cool drinks GST rate for local brands?Yes. Whether local or international, the cool drinks GST rate is based on the type, not the brand.
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Can restaurants charge GST on cold drinks served?Yes. When served in restaurants, cold drinks are taxed at 18% GST under composite supply.
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Can sellers claim Input Tax Credit on cold drink supplies?Yes. Businesses can claim ITC on purchases related to the sale of taxable beverages.