--- title: "New GST on Sugar 2026: 5% Rate on Cane Sugar, Brown Sugar" description: "New GST rate on sugar in 2026 is 5% on refined sugar, brown sugar and molasses. Stay GST-compliant with Busy and apply the correct rate automatically." canonical: "https://busy.in/gst-rates/sugar/" author: "Apurva Maheshwari" published: "2025-05-15T10:12:33.000Z" category: "GST Rates" --- - The new GST rate for all types of sugar, including raw and refined, is set at 5%. - Loose or unbranded jaggery is exempt from GST, while branded or packaged jaggery is taxed at 5%. - Sugar substitutes like aspartame and sucralose are taxed at 18%, depending on their composition. - Businesses can claim Input Tax Credit on sugar used in manufacturing if they are registered under GST. - Small sellers with a turnover below ₹40 lakhs might not need to charge GST on loose sugar. # New GST on Sugar: Raw vs Processed Tax Rates Sugar is a common ingredient in every Indian kitchen and a major component in food processing industries. But how does GST affect its pricing? Whether you’re a consumer, retailer, or in the food business, knowing the **gst on sugar** helps you stay informed and compliant. ## New GST Rate on Sugar & Jaggery (Gur) in India The Government of India is updating GST rates effective after **22 Sep 2025**. Below are the **expected new GST rates** for sugar and jaggery (no compensation cess). | Item | HSN Code | New GST Rate | | --- | --- | --- | | Sugar (raw / white refined) | 1701 | 5% | | Jaggery (gur) – loose / unbranded | 1701 | 0% (Exempt) | | Jaggery (gur) – pre-packaged & labelled | 1701 | 5% | | Sugar substitutes / artificial sweeteners\* | Varies | 18% | _Note:_ Under the two-tier structure (5% / 18%), sugar remains at **5%** while most sweeteners classify at **18%**. \*HSN for sweeteners depends on composition (e.g., chemical/artificial vs plant extracts). Final rates apply as per government notification. ## What Is the New GST Rate on Sugar? | Type of Sugar | HSN Code | GST Rate | | --- | --- | --- | | Raw sugar | 1701 | 5% | | White refined sugar | 1701 | 5% | | Processed sugar (packaged and branded) | 1701 | 5% | | Jaggery (gur) – not branded | 1701 | Exempt (0%) | | Jaggery (branded & packaged) | 1701 | 5% | Sugar (HSN **1701**) is uniformly taxed at **5%**; jaggery (gur) is **exempt** if loose/unbranded and **5%** when pre-packaged & labelled. ## New GST on Sugar Substitutes | Product | GST Rate | | --- | --- | | Sugar (all types) | 5% | | Jaggery (loose) | 0% (Exempt) | | Jaggery (branded) | 5% | | Sugar substitutes (aspartame, sucralose, stevia etc.) | 18% | _Classification tip:_ Artificial/chemical sweeteners are typically taxed at **18%**; plant-based extracts can vary by composition. Use the precise HSN on the invoice. ## What Is the GST Old Rate on Sugar? ### (Old GST Rates – Applicable Until 21st September) Sugar is taxed under the [Goods and Services Tax (GST)](https://busy.in/gst/) system based on its form—raw or processed. | Type of Sugar HSN Code GST Rate | | --- | | Raw sugar 1701 5% | | White refined sugar 1701 5% | | Processed sugar (packaged and branded) 1701 5% | | Jaggery (gur) – not branded 1701 Exempt | | Jaggery (branded & packaged) 1701 5% | The standard **gst rate on sugar** is 5%, which applies to both loose and packaged sugar unless specifically exempted. **Get a Free Trial –** [**Best Accounting Software For Small Business**](https://busy.in/accounting-software/) Live Demo Available Today ## Raise Purchase Orders to Sugar Mills Before Demand Peaks Trusted by 6,00,000+ Users 4.6 Google Rating ## GST on Loose Sugar - **GST on loose sugar** is 5%, just like packaged sugar. - Some local sellers may sell sugar without GST if their turnover is below ₹40 lakhs. - Most retailers and wholesalers dealing in bulk must charge 5% GST. **Get a Free Trial –** [**Best GST Accounting Software For Small Business**](https://busy.in/accounting-software/gst-accounting/) ## GST Impact on the Sugar Industry - Simplified tax: replaced VAT and excise duties - [Input Tax Credit](https://busy.in/gst/what-expenses-can-be-claimed-as-itc/) allowed on machinery, packaging, etc. - Uniform pricing and compliance across states ## Sugar in Food Processing and Beverages If you’re in the food or beverage industry, sugar is treated as a raw material. You pay 5% GST and can [claim Input Tax Credit](https://busy.in/gst/what-expenses-can-be-claimed-as-itc/) on it if registered. For example, biscuit makers, juice producers, and sweet shops using sugar can offset this tax. **Get a Free Demo –** [**Best Billing and Invoicing Software**](https://busy.in/accounting-software/invoicing-and-gst-billing/) ## Old GST on Sugar Substitutes ### (Old GST Rates – Applicable Until 21st September) | Product | GST Rate | | --- | --- | | Sugar (all types) | 5% | | Jaggery (loose) | 0% (Exempt) | | Jaggery (branded) | 5% | | Sugar substitutes (aspartame, sucralose, stevia) | 18% | So if you’re a diabetic or health-conscious buyer opting for substitutes, be aware of the higher tax. ## Conclusion Understanding how **gst on sugar** works helps not just households but also traders, manufacturers, and food businesses handle costs better and follow the right billing practices. ## About the author **Apurva Maheshwari** 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 rate on sugar? The standard **GST rate on sugar** is **5%**, whether loose or packaged. ### Is loose sugar exempt from GST? No. **GST on loose sugar** is also **5%**, but small sellers below the threshold may not collect it. ### Is raw sugar taxed the same as refined sugar? Yes, both **raw and refined sugars** are taxed at **5%** under GST. ### Does jaggery have GST? Unbranded **jaggery is exempt**, while branded or packaged jaggery attracts **5% GST**. ### Can businesses claim ITC on sugar used for manufacturing? Yes. Businesses registered under GST can claim **Input Tax Credit (ITC)** on sugar used in production. ## Related articles - [New GST on Skincare Products: Rate, Branding & Retail Pricing](https://busy.in/gst-rates/skincare-products/) - [New GST on Industrial Machinery: Slabs, ITC & MSME Effect](https://busy.in/gst-rates/industrial-machinery/) - [New GST on Restaurant Meals: Dine-in, Takeaway & Delivery Compared](https://busy.in/gst-rates/restaurant-meals/) - [New GST on Kitchen Utensils: What’s Taxed and What’s Not?](https://busy.in/gst-rates/kitchen-utensils/) - [New GST on Online Education: Rate, Exemptions & EdTech Impact](https://busy.in/gst-rates/online-education/) - [New GST on Packaging Materials: Tax Implication Across Industries](https://busy.in/gst-rates/packaging-materials/) - [New GST on Digital Marketing Services: Tax Rates & Input Credit Explained](https://busy.in/gst-rates/digital-marketing-services/) - [New GST on Pesticides: Rates, Agri-Exemptions & Sector Impact](https://busy.in/gst-rates/pesticides/) - [New GST on Butter: From Dairy to Dining – What You Pay](https://busy.in/gst-rates/butter/) - [GST on Honey: Rate, Applicability & Industry Outlook](https://busy.in/gst-rates/honey/)