New GST on Tea: Loose, Branded, and Packaged Types
- Loose, branded and packaged processed tea in India generally attracts 5% GST under HSN 0902, while unprocessed green tea leaves are Nil-rated.
- 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.
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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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).
GST Rates on Tea in India
| Type of Tea | HSN Code | New GST Rate | Old GST Rate |
|---|---|---|---|
| Loose processed tea, branded or unbranded | 0902 | 5% | 5% |
| Branded or packaged tea | 0902 | 5% | 5% |
| Black or green tea bags | 0902 | 5% | 5% |
| Unprocessed green tea leaves | 0902 | Nil | Nil |
| Instant tea, tea extracts and tea-based preparations | 2101 20 | 5% | 18% |
| Herbal or medicinal tea preparations | Applicable HSN | Depends on classification | Depends on classification |
Type of Tea
HSN Code
New GST Rate
Old GST Rate
Type of Tea
HSN Code
New GST Rate
Old GST Rate
Type of Tea
HSN Code
New GST Rate
Old GST Rate
Type of Tea
HSN Code
New GST Rate
Old GST Rate
Type of Tea
HSN Code
New GST Rate
Old GST Rate
Type of Tea
HSN Code
New GST Rate
Old GST Rate
Note: From 22 September 2025, instant tea, tea extracts and tea-based preparations under HSN 2101 20 moved from 18% to 5%. Processed tea under HSN 0902 remained at 5%, irrespective of whether it is loose, branded or packaged.
Loose vs Branded Tea: What’s the Difference?
- Loose processed tea: 5% GST
- Branded or pre-packaged processed tea: 5% GST
- Tea sold in unit containers or tea bags: 5% GST
- Unprocessed green tea leaves: Nil-rated
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Tea Powder GST Rate
Tea powder under HSN 0902 attracts 5% GST, whether it is loose, branded or packaged.
GST on Tea Leaves
- Processed tea leaves, whether loose, branded or packaged: 5% GST
- Unprocessed green tea leaves: Nil-rated
High-quality loose-leaf tea remains taxable at 5% if it has been processed.
Green Tea GST Rate
- Processed green tea, whether loose, branded or packaged: 5% GST
- Unprocessed green tea leaves: Nil-rated
GST on Herbal Tea
| Product | GST Rate |
|---|---|
| Herbal infusion (without medicinal claim) | 5% |
| Ayurvedic/medicinal tea (under applicable classification) | Depends on classification |
Product
GST Rate
Product
GST Rate
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.
