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Guide · GST Rates

GST on Cold Drinks in India — 40%, 5% or Nil?

The correct GST rate for aerated drinks, fruit juices, energy drinks, packaged water, coconut water and milk drinks after the GST 2.0 reform of 22 September 2025.

Written by: TaxClue Editorial Desk
Updated: 18 August 2026
Reading time: 5 min
Questions: 15 answered

Updated August 2026
GST Expert Reviewed
Aerated · Juice · Water · Milk

Quick Answer

GST on cold drinks depends on the type. Aerated, carbonated and sweetened drinks — Coca-Cola, Pepsi, Sprite, Thums Up, Red Bull, Monster — now attract a flat 40% under the GST 2.0 reform effective 22 September 2025 (the earlier 28% + 12% cess was merged into one 40% rate). Fruit juices, non-carbonated fruit drinks, coconut water and packaged drinking water are 5%. Plain and UHT milk are Nil (exempt).

At a glance

GST Rates on Cold Drinks & Beverages

Every common beverage, its HSN code and its GST rate after the GST 2.0 rationalisation. See our HSN / SAC code guide for classification.

Beverage / Category	Examples	HSN	GST Rate
Aerated / carbonated soft drink	Coca-Cola, Pepsi, Sprite, Thums Up, Limca, 7Up	2202	40%
Carbonated fruit / flavoured drink	Appy Fizz, Mirinda, aerated fruit drinks	2202	40%
Energy drink (carbonated)	Red Bull, Monster, Sting, Rockstar	2202	40%
Fruit juice (100% / nectar)	Tropicana, Real, Dabur	2009	5%
Non-carbonated fruit drink	Maaza, Frooti, Slice (still)	2202	5%
Coconut water (packaged)	Tender coconut water in carton/bottle	2009	5%
Vegetable juice / smoothie	Tomato, carrot juice (non-carbonated)	2009	5%
Flavoured / plant-based milk drink	Amul Kool, soy milk, almond milk	2202	5%
Lassi, chaas, buttermilk	Branded packaged lassi / chhach	2202	5%
Packaged drinking water	Bisleri, Kinley (all pack sizes)	2201	5%
Plain fresh / UHT milk	Amul, Mother Dairy (unflavoured)	0401	Nil
Alcoholic beverages	Beer, whisky, wine, rum	—	Outside GST

Rates reflect the GST 2.0 two-slab (5%/18%) structure plus the 40% demerit rate effective 22 September 2025. Confirm on the official GST portal before invoicing.

The core question

Carbonated 40% vs Non-Carbonated 5%

One factor drives the rate for most drinks: is the beverage aerated (carbonated) and sweetened / flavoured? If yes, it is a demerit good taxed at 40%. Non-carbonated juices, fruit drinks, coconut water, packaged water and milk drinks now sit at 5%.

Non-carbonated drinks

Fruit juices & nectars (Tropicana, Real)
Non-fizzy fruit drinks (Maaza, Frooti)
Coconut water & vegetable juices
Packaged drinking water (all sizes)
Flavoured / plant-based milk drinks

40%

Aerated / sweetened drinks

Cola & soft drinks (Coke, Pepsi, Sprite)
Carbonated fruit drinks (Appy Fizz)
Energy drinks (Red Bull, Monster, Sting)
Any sweetened / flavoured carbonated drink
Highest beverage slab — a demerit good

Watch the carbonation, not the fruit

A fruit-based drink is 5% only while it is still (non-carbonated). Add CO2 and the same fruit drink jumps to the 40% aerated slab. Correct HSN classification (2202 aerated vs 2009/2202 non-aerated) is what decides the rate — get it wrong and you under-collect 35 percentage points of tax.

Not sure which slab your beverage falls in?

Get My GST Rate →

GST 2.0 change

Why Aerated Drinks Are Now 40%

Before 22 September 2025, aerated drinks carried 28% GST + 12% Compensation Cess — an effective 40%. The GST 2.0 reform removed the compensation cess and folded the burden into a single 40% demerit rate, alongside tobacco, pan masala and other sin/luxury goods. The headline number changed, but the overall tax on a fizzy drink stayed at roughly 40%.

1Pre-22 Sep 202528% GST + 12% cess ≈ 40%
2GST 2.0 reformCess removed, slabs merged
3From 22 Sep 2025Single 40% GST on aerated drinks
4Juices & waterCut to 5% for consumers

Worked example

How GST Adds Up — ₹100 Base Price

40% Aerated soft drink

Base price₹100

GST @ 40%₹40

Price + tax₹140

5% Fruit juice / water

Base price₹100

GST @ 5%₹5

Price + tax₹105

The same ₹100 of drink carries ₹40 of GST if it is fizzy and sweetened, but only ₹5 if it is a plain juice or packaged water — a stark reminder of how much classification matters. Try our GST calculator for your own figures.

Manufacturing or distributing beverages? Get your HSN classification and rate confirmed.

Get Beverage GST Advice →

For the trade

ITC, Cess & Compliance for Beverage Businesses

Manufacturers, distributors and retailers of cold drinks registered under GST can claim Input Tax Credit on inputs — sugar, concentrate, CO2, bottles, machinery and services — subject to normal rules.

The 40% on aerated drinks is now a single GST rate — with the compensation cess removed, there is no separate cess ledger to track from 22 Sep 2025.
Beverage traders on the 40% or 5% slabs follow standard forward-charge invoicing and full ITC on eligible inputs.
Selling on e-commerce (Amazon, BigBasket, quick-commerce) triggers TCS and mandatory registration regardless of turnover.
Watch the aerated vs non-aerated line — mis-classifying a fizzy drink as a 5% juice is a high-value demand risk on audit.

✓You likely need GST registration if

You manufacture or bottle beverages
You distribute / wholesale cold drinks
You sell drinks via any e-commerce platform
Aggregate turnover crosses ₹40L goods / ₹20L services

!Get classification checked if

You sell carbonated fruit or flavoured drinks
You bottle water or coconut water
You launch a new energy or health drink
You are unsure of the correct HSN code

TaxClue Insight

The GST 2.0 reform widened the gap between "sin" beverages (40%) and everyday drinks (5% / Nil). For a beverage brand, the single biggest GST decision is HSN classification — whether a product is aerated and sweetened. That one call moves the tax on every unit by up to 35 percentage points.

Sources

Rates & notifications: gst.gov.in
CBIC rate finder: cbic-gst.gov.in
GST 2.0 rate rationalisation: 56th GST Council decisions, effective 22 September 2025
HSN: Chapter 22 (2201/2202 beverages), 2009 (juices), 0401 (milk)

Disclaimer: This guide is general information based on the law and notifications in force when it was last updated. It is not professional advice for your case — rates, thresholds and due dates change, so check the current position or speak to our CA team before you act on it.

Questions, answered

Short, direct answers to the 15 questions readers ask most on this topic.

Aerated carbonated soft drinks such as Coca-Cola, Pepsi, Sprite, Thums Up, Limca and 7Up attract 40% GST under HSN 2202. This is the demerit rate introduced by the GST 2.0 reform effective 22 September 2025, which removed the earlier 12% Compensation Cess and merged the 28% GST plus cess into a single 40% rate. The overall tax burden of roughly 40% is unchanged; only the structure changed.

From 22 September 2025, all aerated, carbonated, sweetened and flavoured beverages are taxed at a flat 40% GST. The previous system of 28% GST + 12% Compensation Cess was consolidated into this single 40% demerit rate. Non-carbonated drinks such as fruit juices, packaged water and milk drinks were cut to 5%.

Yes. Carbonated energy drinks such as Red Bull, Monster, Sting and Rockstar are treated as aerated beverages and attract 40% GST under HSN 2202, the same as regular soft drinks. The deciding factor is that they are carbonated and sweetened. Non-carbonated health drinks in powder or ready-to-drink milk form may attract a lower rate depending on formulation — always verify the HSN code.

The headline GST rate on aerated drinks rose from 28% to 40% on 22 September 2025, but the 12% Compensation Cess was simultaneously removed. Since 28% + 12% cess already equalled about 40%, the effective tax on a fizzy sweetened drink is broadly the same as before — it is now shown as one 40% GST figure instead of GST plus cess.

Packaged fruit juices, nectars and non-carbonated fruit drinks such as Tropicana, Real, Dabur, Maaza, Frooti and Slice attract 5% GST after the GST 2.0 reform — reduced from the earlier 12%. They fall under HSN 2009 (fruit/vegetable juices) or 2202 (fruit-based drinks). The 5% rate applies only while the drink is non-carbonated; a carbonated fruit drink is taxed at 40%.

Packaged drinking water attracts 5% GST under HSN 2201 after the September 2025 rationalisation, across pack sizes including 1-litre, 500ml and 20-litre jars (earlier smaller packs were 18% and 20-litre packs 12%). Plain sparkling / mineral water without added sugar or flavour also follows the 5% water rate; only sweetened or flavoured carbonated water falls into the 40% aerated slab.

Packaged tender coconut water in a carton or bottle attracts 5% GST (HSN 2009). Fresh, unpackaged tender green coconut water also sits at the concessional rate. Coconut water is treated as a non-carbonated natural drink, so it does not attract the 40% aerated-beverage rate.

Plain fresh, pasteurised and UHT milk (unflavoured) are fully exempt — Nil GST under HSN 0401; UHT milk was moved from 5% to Nil on 22 September 2025. Flavoured milk, plant-based milk drinks (soy, almond) and packaged lassi/chaas attract 5% GST under HSN 2202. Milkshakes served in a restaurant are taxed as a restaurant service (5% or 18%).

Ready-to-drink plant-based milk drinks such as soy milk and almond milk attract 5% GST under HSN 220299 after the GST 2.0 reform (reduced from 18%). They are treated like other non-carbonated beverages, not as aerated drinks, so the 40% rate does not apply.

Aerated, sweetened and flavoured beverages are treated as demerit or "sin" goods, so GST 2.0 places them in the top 40% slab alongside tobacco and pan masala. Everyday, non-carbonated drinks — juices, water, coconut water and milk drinks — were made cheaper at 5% (or Nil for plain milk) to reduce the burden on essential consumption.

No. The 12% Compensation Cess that earlier applied to aerated drinks was removed under GST 2.0 from 22 September 2025 and absorbed into the single 40% GST rate. There is no longer a separate cess ledger to maintain for carbonated beverages.

Yes. GST-registered manufacturers, distributors and retailers of beverages can claim Input Tax Credit on eligible inputs — sugar, concentrate, CO2, bottles, packaging, machinery and services — under the normal CGST rules. With the compensation cess removed, the 40% on aerated drinks is a single GST amount, simplifying credit and set-off.

You must register once aggregate turnover crosses ₹40 lakh for goods (₹20 lakh in special-category states). Registration is mandatory regardless of turnover if you sell through an e-commerce platform such as Amazon, BigBasket or a quick-commerce app, or make inter-state supplies. Manufacturers and wholesalers of beverages almost always need registration.

Aerated waters and soft drinks fall under HSN 2202; fruit and vegetable juices under HSN 2009; packaged and mineral water under HSN 2201; and plain milk under HSN 0401. The exact 8-digit sub-heading (e.g. 220210 for aerated waters, 220299 for other non-alcoholic beverages) determines the rate, so classification should be confirmed carefully.

Alcoholic liquor for human consumption is outside GST and is taxed under state VAT and excise instead. If a bill includes both a soft drink and alcohol, GST (40% on the aerated drink, or 5% on a juice/water) applies to the non-alcoholic items, while the alcohol portion carries state VAT/excise under a separate tax head.