GST on Tea: Loose, Branded, and Packaged Types
India is one of the largest producers and consumers of tea in the world. From morning chai to herbal infusions, tea is a daily essential for many. But how is tea taxed under GST? This guide explains the gst on tea, whether loose, branded, green, or herbal.
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GST Rate on Tea in India
The Goods and Services Tax (GST) system classifies tea based on its form (loose, packaged) and type (black, green, herbal). The standard GST rate on tea is:
| Type of Tea | HSN Code | GST Rate |
|---|---|---|
| Loose tea (unbranded) | 0902 | 0% (Exempt) |
| Branded/packaged tea | 0902 | 5% |
| Tea bags (black/green) | 0902 | 5% |
| Instant tea mix | 2101 | 18% |
| Herbal or medicinal teas | 2106 | 12% or 18% |
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Loose vs Branded Tea: What’s the Difference?
- Loose tea (sold without packaging or label): GST exempt (0%)
- Branded and pre-packaged tea: 5% GST
- Tea in unit containers with brand name or label: Treated as branded
Tea Powder GST Rate
The tea powder gst rate is the same as regular packaged tea:
- If branded/packaged: 5%
- If sold loose/unbranded: 0%
GST on Tea Leaves
- Loose, unbranded tea leaves: 0% GST
- Branded or packaged tea leaves: 5% GST
Even high-quality loose-leaf teas are exempt if sold unpackaged and unbranded.
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Green Tea GST Rate
- Branded/packaged green tea: 5% GST
- Loose green tea (unbranded): 0% GST
GST on Herbal Tea
| Product | GST Rate |
|---|---|
| Herbal infusion (without medicinal claim) | 5% or 12% |
| Ayurvedic/medicinal tea (under Ayurveda license) | 12% or 18% |
Input Tax Credit for Tea Businesses
- Packaging materials
- Logistics and freight
- Marketing services
- Equipment used in blending or manufacturing
Businesses can claim Input Tax Credit if selling taxable tea products.
Conclusion
Understanding the gst on tea helps buyers choose better and sellers price fairly. Whether you enjoy a basic brew or a premium blend, GST plays a role in every cup.
I am a chartered accountant with over 14 years of experience. I understand income tax, GST, and balancing financial records. I analyze financial statements and tax codes effectively. However, I also have a passion for writing, which is different from working with numbers. Recently, I started writing articles and blog posts. My goal is to make finance easier for everyday people to understand.
Frequently Asked Questions (FAQs)
- What is the GST rate on tea powder?The tea powder GST rate is 5% for packaged and 0% for loose/unbranded powder.
- Is GST applicable on tea leaves?GST on tea leaves is 0% if sold loose and unbranded, 5% if packaged.
- What is the green tea GST rate?Branded green tea is taxed at 5%, like other packaged teas.
- Do herbal teas attract GST?Yes. The GST on herbal tea ranges from 5% to 18%, depending on ingredients and classification.
- Is all tea in India taxed under GST?Yes, but rates vary: loose and unbranded tea is GST-exempt, while packaged or flavored teas are taxable.
