New GST on Sugar: Raw vs Processed Tax 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.
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
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% |
Item
HSN Code
New GST Rate
Item
HSN Code
New GST Rate
Item
HSN Code
New GST Rate
Item
HSN Code
New GST Rate
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% |
Type of Sugar
HSN Code
GST Rate
Type of Sugar
HSN Code
GST Rate
Type of Sugar
HSN Code
GST Rate
Type of Sugar
HSN Code
GST Rate
Type of Sugar
HSN Code
GST Rate
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% |
Product
GST Rate
Product
GST Rate
Product
GST Rate
Product
GST Rate
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) 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% |
Type of Sugar HSN Code GST Rate
Type of Sugar HSN Code GST Rate
Type of Sugar HSN Code GST Rate
Type of Sugar HSN Code GST Rate
Type of Sugar HSN Code GST Rate
The standard gst rate on sugar is 5%, which applies to both loose and packaged sugar unless specifically exempted.
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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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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% |
Product
GST Rate
Product
GST Rate
Product
GST Rate
Product
GST Rate
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.
