---
title: "New GST on Tea 2026: 5% Rate on Tea Leaves, Tea Powder & Herbal"
description: "New GST rate on tea in 2026 is 5% on black tea, green tea, tea bags and packaged loose tea. Busy ensures accurate GST billing on every sale and purchase."
canonical: "https://busy.in/gst-rates/tea/"
author: "Vineet Goyal"
published: "2025-05-16T06:44:00.000Z"
category: "GST Rates"
---

-   Loose, unbranded tea in India is exempt from GST, while branded or packaged tea attracts **5% GST**.
-   Tea bags, black tea, green tea, and instant tea mixes are generally taxed at **5% GST** under their applicable classifications.
-   Herbal teas may have different GST rates depending on their ingredients and classification.
-   Tea businesses can claim eligible Input Tax Credit on costs like packaging and logistics for taxable supplies.
-   Understanding GST on tea helps businesses maintain compliance and ensure correct pricing.

# New 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**](https://busy.in/gst/) ? This guide explains the **gst on tea**, whether loose, branded, green, or herbal.

## New GST Rate on Tea in India

The Government of India updated the GST rates from **22 Sep 2025.** Below are the revised new GST rates for tea (no compensation cess).

## New GST Rate on Tea

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 | New GST Rate |
| --- | --- | --- |
| Loose tea (unbranded) | 0902 | **0% (Exempt)** |
| Branded/packaged tea | 0902 | **5%** |
| Tea bags (black/green) | 0902 | **5%** |
| Instant tea mix | 2101 | **5%** |
| Herbal or medicinal teas | 2106 | **5% or 18%** |

## Old GST Rate on Tea in India

### (Old GST Rates – Applicable Until 21st September)

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% |

**Get a Free Trial –**  [**Best Accounting Software For Small Business**](https://busy.in/accounting-software/)

## 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

Live Demo Available Today

## Scan Tea Product Barcodes for Faster Wholesale Billing

Trusted by 6,00,000+ Users

4.6 Google Rating

## 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.

**Explore a Free Demo of –**  [**Best Inventory Management Software For Small Business**](https://busy.in/accounting-software/inventory-management/)

## 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%** |
| Ayurvedic/medicinal tea (under applicable classification) | **Depends on classification** |

## 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**](https://busy.in/gst/what-expenses-can-be-claimed-as-itc/)  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.

## About the author

**Vineet Goyal**

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

### 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.

## 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/)