New GST on Sugar: Raw vs Processed Tax Rates
- The sugar GST rate on cane sugar, beet sugar and refined sugar under HSN 1701 is 5%. There was no separate rate change for these products on 22 September 2025.
- Loose or non-pre-packaged jaggery is Nil-rated, while pre-packaged and labelled jaggery attracts 5% GST.
- Sugar substitutes such as aspartame and sucralose generally attract 18% GST, subject to their exact HSN classification.
- Registered businesses can claim eligible Input Tax Credit on sugar used for taxable business supplies, subject to GST conditions.
- Small suppliers of goods may qualify for the applicable GST registration threshold based on their aggregate turnover and state; this does not change the 5% GST rate on sugar itself.
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.
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New GST Rate on Sugar & Jaggery (Gur) in India
GST rates for certain sugar products were revised from 22 September 2025. Ordinary cane and beet sugar continue to attract 5% GST, while some other sugars and sugar products moved to 5%.
| Item | HSN Code | GST Rate From 22 Sep 2025 | Rate Before 22 Sep 2025 |
|---|---|---|---|
| Cane/beet sugar, including raw and refined sugar | 1701 | 5% | 5% |
| Jaggery (gur), other than pre-packaged and labelled | 1701 or 1702 | Nil | Nil |
| Jaggery (gur), pre-packaged and labelled | 1701 or 1702 | 5% | 5% |
| Sugar with added flavouring/colouring and sugar cubes under 1701 91/1701 99, other than goods already attracting 5% or Nil | 1701 91 / 1701 99 | 5% | 12% |
| Other sugars under HSN 1702, subject to specified exclusions | 1702 | 5% | 18% |
| Chemical/artificial sweeteners such as aspartame or sucralose | Varies | Generally 18% | Generally 18% |
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Note: The HSN and GST rate for sugar substitutes depend on their exact composition and classification. Plant-based extracts such as stevia extracts should not automatically be treated as 18%.
What Is the New GST Rate on Sugar?
| Type of Sugar | HSN Code | GST Rate From 22 Sep 2025 | Rate Before 22 Sep 2025 |
|---|---|---|---|
| Raw cane/beet sugar | 1701 | 5% | 5% |
| White refined cane/beet sugar | 1701 | 5% | 5% |
| Refined sugar with added flavouring or colouring, where covered by 1701 91/1701 99 and not already at 5%/Nil | 1701 91 / 1701 99 | 5% | 12% |
| Jaggery, other than pre-packaged and labelled | 1701 or 1702 | Nil | Nil |
| Jaggery, pre-packaged and labelled | 1701 or 1702 | 5% | 5% |
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Ordinary sugar under HSN 1701 generally attracts 5% GST. Jaggery is Nil-rated when it is other than pre-packaged and labelled, and attracts 5% when pre-packaged and labelled.
New GST on Sugar Substitutes
| Product | GST Rate From 22 Sep 2025 | Rate Before 22 Sep 2025 |
|---|---|---|
| Cane/beet sugar under HSN 1701 | 5% | 5% |
| Jaggery, other than pre-packaged and labelled | Nil | Nil |
| Jaggery, pre-packaged and labelled | 5% | 5% |
| Other sugars under HSN 1702, subject to specified exclusions | 5% | 18% |
| Aspartame/sucralose and similar chemical sweeteners | Generally 18% | Generally 18% |
| Stevia or other plant-based extracts | Depends on HSN classification | Depends on HSN classification |
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Classification tip: Artificial/chemical sweeteners are typically taxed at 18%; plant-based extracts can vary by composition. Use the precise HSN on the invoice.
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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.
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GST Impact on the Sugar Industry
- Simplified tax: replaced VAT and excise duties
- Input Tax Credit 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 on it if registered.
For example, biscuit makers, juice producers, and sweet shops using sugar can offset this tax.
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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.
