{"id":13704,"date":"2024-08-27T19:32:37","date_gmt":"2024-08-27T14:02:37","guid":{"rendered":"https:\/\/piceapp.com\/blogs\/?p=13704"},"modified":"2025-05-26T17:17:29","modified_gmt":"2025-05-26T11:47:29","slug":"gst-rate-on-soft-drinks-in-restaurants","status":"publish","type":"post","link":"https:\/\/piceapp.com\/blogs\/gst-rate-on-soft-drinks-in-restaurants\/","title":{"rendered":"GST Rate on Soft Drinks in Restaurants"},"content":{"rendered":"\n<div class=\"wp-block-group has-background\" style=\"background-color:#f2f5f9\"><div class=\"wp-block-group__inner-container is-layout-constrained wp-block-group-is-layout-constrained\">\n<h3 class=\"wp-block-heading\" id=\"key-takeaways\"><strong>Key Takeaways<\/strong><\/h3>\n\n\n\n<ul class=\"wp-block-list\">\n<li>Most carbonated drinks like Coca-Cola and 7up have a GST rate of 28%.<\/li>\n\n\n\n<li>Different types of water, including distilled and 20-liter water cans, generally have an 18% GST rate.<\/li>\n\n\n\n<li>The GST rate for cold drinks served in restaurants varies from 5% to 18%, depending on the type of restaurant.<\/li>\n<\/ul>\n<\/div><\/div>\n\n\n\n<p>Soft drinks, often referred to as aerated drinks, are popular items on restaurant menus. Understanding the GST rates and HSN codes applicable to these beverages can help restaurant owners and customers ensure compliance and proper billing.<\/p>\n\n\n\n<div class=\"wp-block-group has-background\" style=\"background-color:#8dd2fc8f\"><div class=\"wp-block-group__inner-container is-layout-constrained wp-block-group-is-layout-constrained\">\n<p><strong><strong>Handle all your sales and purchase invoices in one place.<\/strong><br><\/strong>Pice\u2019s all-in-one invoice management tool helps you track, send, and organize invoices from a single dashboard. Automatically share new invoices with customers, send timely payment reminders, and keep your collections under control\u2014effortlessly.<\/p>\n<\/div><\/div>\n\n\n\n<p><strong>Want early access? Fill out this form to get request a demo!<\/strong><\/p>\n\n\n\n<iframe loading=\"lazy\" src=\"https:\/\/docs.google.com\/forms\/d\/e\/1FAIpQLSc35bDn_zUkA1TOZRtcFsZEfbzs5z5gA4moGFO4jJoyVN8BIw\/viewform?embedded=true\" width=\"640\" height=\"413\" frameborder=\"0\" marginheight=\"0\" marginwidth=\"0\">Loading\u2026<\/iframe>\n\n\n\n<p>The GST rates on various beverages and drinks, including cold drinks and other <a href=\"https:\/\/en.wikipedia.org\/wiki\/Non-alcoholic_drink\" target=\"_blank\" rel=\"noopener\">non-alcoholic beverages<\/a>, have a significant impact on beverage costs. The current GST rate for non-alcoholic drinks, such as fruit-based carbonated drinks, is 18%. This tax rate influences the pricing and, consequently, consumer behavior, as informed consumer choices are often driven by cost considerations.<\/p>\n\n\n\n<p>In the cold drink business, brands like 7up are subject to specific GST rates that can affect the overall beverage tax. Understanding the respective GST rates for different types of beverages, including fruity beverages and cold beverages, is crucial for both businesses and consumers.<\/p>\n\n\n\n<p>Here\u2019s a detailed guide on the GST rates on soft drinks in restaurants.<\/p>\n\n\n\n<div class=\"wp-block-rank-math-toc-block\" id=\"rank-math-toc\"><h2>Table of Contents<\/h2><nav><ul><li><a href=\"#key-takeaways\">Key Takeaways<\/a><\/li><li><a href=\"#the-non-alcoholic-beverage-industry-appeals-for-reduced-taxes-on-fruity-drinks\">The Non-Alcoholic Beverage Industry Appeals for Reduced Taxes on Fruity Drinks<\/a><\/li><li><a href=\"#faqs\">FAQS<\/a><\/li><li><a href=\"#faq-question-1720761315133\">What is the GST rate for soft drinks in non-AC restaurants?<\/a><\/li><li><a href=\"#faq-question-1720761323942\">How does the GST rate differ for soft drinks in AC restaurants?<\/a><\/li><li><a href=\"#faq-question-1720761330742\">Are there additional taxes on carbonated beverages apart from GST?<\/a><\/li><li><a href=\"#faq-question-1720761337142\">What HSN code should be used for classifying soft drinks for GST purposes?<\/a><\/li><li><a href=\"#faq-question-1720761345646\">How does the GST rate on tender coconut water differ from other beverages?<\/a><\/li><\/ul><\/nav><\/div>\n\n\n\n<h2 class=\"wp-block-heading\" id=\"impact-of-notification-no-01-2021-compensation-cess-rate-on-the-carbonated-beverage-industry\"><strong>Impact of Notification No. 01\/2021-Compensation Cess (Rate) on the Carbonated Beverage Industry<\/strong><\/h2>\n\n\n\n<figure class=\"wp-block-image size-large\"><img loading=\"lazy\" decoding=\"async\" width=\"1024\" height=\"576\" src=\"https:\/\/piceapp.com\/blogs\/wp-content\/uploads\/2024\/07\/Compensation-Cess-Rate-on-the-Carbonated-Beverage-Industry-1024x576.jpg\" alt=\"Compensation Cess (Rate) on the Carbonated Beverage Industry\" class=\"wp-image-13747\" style=\"aspect-ratio:16\/9;object-fit:cover\" title=\"\" srcset=\"https:\/\/piceapp.com\/blogs\/wp-content\/uploads\/2024\/07\/Compensation-Cess-Rate-on-the-Carbonated-Beverage-Industry-1024x576.jpg 1024w, https:\/\/piceapp.com\/blogs\/wp-content\/uploads\/2024\/07\/Compensation-Cess-Rate-on-the-Carbonated-Beverage-Industry-300x169.jpg 300w, https:\/\/piceapp.com\/blogs\/wp-content\/uploads\/2024\/07\/Compensation-Cess-Rate-on-the-Carbonated-Beverage-Industry-768x432.jpg 768w, https:\/\/piceapp.com\/blogs\/wp-content\/uploads\/2024\/07\/Compensation-Cess-Rate-on-the-Carbonated-Beverage-Industry.jpg 900w\" sizes=\"auto, (max-width: 1024px) 100vw, 1024px\" \/><figcaption><\/figcaption><\/figure>\n\n\n\n<p>The issuance of Notification No. 01\/2021-Compensation Cess (Rate) has significant implications for the carbonated beverage industry. This notification levies an additional compensation cess on <a href=\"https:\/\/en.wikipedia.org\/wiki\/soft_drink#:~:text=Carbonated%20drinks%20or%20fizzy%20drinks,when%20the%20pressure%20is%20released.\" target=\"_blank\" rel=\"noopener\">carbonated drinks,<\/a> which directly impacts the overall GST rates applicable to these products.<\/p>\n\n\n\n<p>The increased tax burden can affect pricing strategies of companies, potentially leading to higher retail prices. This, in turn, may dampen consumer demand, especially in price-sensitive markets. The industry must navigate these changes by adjusting their cost management practices and ensuring tax compliance to avoid penalties.<\/p>\n\n\n\n<p>Additionally, companies may need to revisit their revenue generation models to accommodate the new tax structure while remaining competitive in the market.<\/p>\n\n\n\n<figure class=\"wp-block-embed is-type-video is-provider-youtube wp-block-embed-youtube wp-embed-aspect-16-9 wp-has-aspect-ratio\"><div class=\"wp-block-embed__wrapper\">\n<iframe loading=\"lazy\" title=\"Carbonated fruit drink, Clarification Circular No 189\/01\/2023-GST, Notification No.12\/2022-C.T(Rate)\" width=\"640\" height=\"360\" src=\"https:\/\/www.youtube.com\/embed\/c7LkrvWJ2I8?feature=oembed\" frameborder=\"0\" allow=\"accelerometer; autoplay; clipboard-write; encrypted-media; gyroscope; picture-in-picture; web-share\" referrerpolicy=\"strict-origin-when-cross-origin\" allowfullscreen><\/iframe>\n<\/div><\/figure>\n\n\n\n<h2 class=\"wp-block-heading\" id=\"gst-rates-on-other-beverages-and-drinks\">GST Rates on Other Beverages and Drinks<\/h2>\n\n\n\n<p>GST rates on beverages and drinks vary based on their classification under different HSN codes. For instance, fruit juices and health drinks may attract lower GST rates compared to carbonated beverages and energy drinks.<\/p>\n\n\n\n<p>Bottled water, including mineral and aerated water, also falls under specific <a href=\"https:\/\/www.investopedia.com\/terms\/t\/taxbracket.asp\" target=\"_blank\" rel=\"noopener\">tax brackets.<\/a> Understanding the tax classification and corresponding GST rates for each type of beverage is crucial for businesses to ensure compliance and accurately assess their tax liability.<\/p>\n\n\n\n<p>Properly categorizing these products under the correct HSN codes helps in determining the applicable GST rates, which can impact pricing, marketing strategies, and overall financial planning for companies in the beverage industry.<\/p>\n\n\n\n<figure class=\"wp-block-table is-style-stripes\"><table class=\"has-fixed-layout\"><thead><tr><th class=\"has-text-align-center\" data-align=\"center\">Beverage\/Drink Type<\/th><th class=\"has-text-align-center\" data-align=\"center\">HSN Code<\/th><th class=\"has-text-align-center\" data-align=\"center\">GST Rate<\/th><\/tr><\/thead><tbody><tr><td class=\"has-text-align-center\" data-align=\"center\">Aerated Water&nbsp;<\/td><td class=\"has-text-align-center\" data-align=\"center\">2201<\/td><td class=\"has-text-align-center\" data-align=\"center\">18%<\/td><\/tr><tr><td class=\"has-text-align-center\" data-align=\"center\">Mineral Water<\/td><td class=\"has-text-align-center\" data-align=\"center\">2201<\/td><td class=\"has-text-align-center\" data-align=\"center\">18%<\/td><\/tr><tr><td class=\"has-text-align-center\" data-align=\"center\">Packaged Drinking Water<\/td><td class=\"has-text-align-center\" data-align=\"center\">2201<\/td><td class=\"has-text-align-center\" data-align=\"center\">18%<\/td><\/tr><tr><td class=\"has-text-align-center\" data-align=\"center\">Tender Coconut Water<\/td><td class=\"has-text-align-center\" data-align=\"center\">2202<\/td><td class=\"has-text-align-center\" data-align=\"center\">12%<\/td><\/tr><tr><td class=\"has-text-align-center\" data-align=\"center\">Non-Alcoholic Beverages (carbonated)<\/td><td class=\"has-text-align-center\" data-align=\"center\">2202<\/td><td class=\"has-text-align-center\" data-align=\"center\">28%<\/td><\/tr><tr><td class=\"has-text-align-center\" data-align=\"center\">Fruit-Based Fizzy Drinks<\/td><td class=\"has-text-align-center\" data-align=\"center\">2202<\/td><td class=\"has-text-align-center\" data-align=\"center\">28%<\/td><\/tr><tr><td class=\"has-text-align-center\" data-align=\"center\">Carbonated Fruit Drinks<\/td><td class=\"has-text-align-center\" data-align=\"center\">2202<\/td><td class=\"has-text-align-center\" data-align=\"center\">28%<\/td><\/tr><tr><td class=\"has-text-align-center\" data-align=\"center\">Fruit Juice-Based Drinks<\/td><td class=\"has-text-align-center\" data-align=\"center\">2202<\/td><td class=\"has-text-align-center\" data-align=\"center\">12%<\/td><\/tr><tr><td class=\"has-text-align-center\" data-align=\"center\">Other Non-Alcoholic Beverages<\/td><td class=\"has-text-align-center\" data-align=\"center\">2202<\/td><td class=\"has-text-align-center\" data-align=\"center\">18%<\/td><\/tr><tr><td class=\"has-text-align-center\" data-align=\"center\">Artificial Mineral Waters<\/td><td class=\"has-text-align-center\" data-align=\"center\">2201<\/td><td class=\"has-text-align-center\" data-align=\"center\">18%<\/td><\/tr><tr><td class=\"has-text-align-center\" data-align=\"center\">Distilled Water<\/td><td class=\"has-text-align-center\" data-align=\"center\">2851<\/td><td class=\"has-text-align-center\" data-align=\"center\">18%<\/td><\/tr><tr><td class=\"has-text-align-center\" data-align=\"center\">Cold Drinks (like Coca-Cola, 7up)<\/td><td class=\"has-text-align-center\" data-align=\"center\">2202<\/td><td class=\"has-text-align-center\" data-align=\"center\">28%<\/td><\/tr><tr><td class=\"has-text-align-center\" data-align=\"center\">Sugar-Free and Sugary Beverages<\/td><td class=\"has-text-align-center\" data-align=\"center\">2202<\/td><td class=\"has-text-align-center\" data-align=\"center\">28%<\/td><\/tr><tr><td class=\"has-text-align-center\" data-align=\"center\">Water (NIL water)<\/td><td class=\"has-text-align-center\" data-align=\"center\">2201<\/td><td class=\"has-text-align-center\" data-align=\"center\">NIL<\/td><\/tr><\/tbody><\/table><\/figure>\n\n\n\n<h2 class=\"wp-block-heading\" id=\"gst-on-cold-drinks-in-restaurants\"><strong>GST on Cold Drinks in Restaurants<\/strong><\/h2>\n\n\n\n<figure class=\"wp-block-image size-large\"><img loading=\"lazy\" decoding=\"async\" width=\"1024\" height=\"576\" src=\"https:\/\/piceapp.com\/blogs\/wp-content\/uploads\/2024\/07\/GST-on-Cold-Drinks-in-Restaurants-1024x576.jpg\" alt=\"GST on Cold Drinks in Restaurants\" class=\"wp-image-13749\" style=\"aspect-ratio:16\/9;object-fit:cover\" title=\"\" srcset=\"https:\/\/piceapp.com\/blogs\/wp-content\/uploads\/2024\/07\/GST-on-Cold-Drinks-in-Restaurants-1024x576.jpg 1024w, https:\/\/piceapp.com\/blogs\/wp-content\/uploads\/2024\/07\/GST-on-Cold-Drinks-in-Restaurants-300x169.jpg 300w, https:\/\/piceapp.com\/blogs\/wp-content\/uploads\/2024\/07\/GST-on-Cold-Drinks-in-Restaurants-768x432.jpg 768w, https:\/\/piceapp.com\/blogs\/wp-content\/uploads\/2024\/07\/GST-on-Cold-Drinks-in-Restaurants.jpg 900w\" sizes=\"auto, (max-width: 1024px) 100vw, 1024px\" \/><figcaption><\/figcaption><\/figure>\n\n\n\n<p>When cold drinks are served in restaurants, the applicable GST rate can vary based on the type of establishment and the specific circumstances of the service:<\/p>\n\n\n\n<ul class=\"wp-block-list\">\n<li><strong>Non-AC Restaurants<\/strong>: The GST rate for cold drinks served here is typically lower.\n<ul class=\"wp-block-list\">\n<li><strong>GST Rate<\/strong>: 5%<\/li>\n<\/ul>\n<\/li>\n\n\n\n<li><strong>AC Restaurants<\/strong>: For cold drinks served in air-conditioned restaurants.\n<ul class=\"wp-block-list\">\n<li><strong>GST Rate<\/strong>: 18%<\/li>\n<\/ul>\n<\/li>\n<\/ul>\n\n\n\n<h3 class=\"wp-block-heading\" id=\"the-non-alcoholic-beverage-industry-appeals-for-reduced-taxes-on-fruity-drinks\">The Non-Alcoholic Beverage Industry Appeals for Reduced Taxes on Fruity Drinks<\/h3>\n\n\n\n<p>The non-alcoholic beverage industry has been actively appealing for reduced taxes on fruity drinks. This sector argues that lower GST rates on such beverages can enhance consumer affordability, promote healthier drinking choices, and stimulate market growth.<\/p>\n\n\n\n<p>Industry representatives and lobbyists have presented these appeals to government<a href=\"https:\/\/www.collinsdictionary.com\/dictionary\/english\/policymaker\" target=\"_blank\" rel=\"noopener\"> policymakers<\/a>, highlighting the potential benefits of reduced taxes on fruity drinks. A favorable response from the government can lead to adjustments in the GST rates, making these beverages more accessible to a broader consumer base.<\/p>\n\n\n\n<p>By aligning tax policies with the industry&#8217;s recommendations, the government can support the growth of the non-alcoholic beverage market while encouraging the consumption of healthier drink options.<\/p>\n\n\n\n<h2 class=\"wp-block-heading\" id=\"conclusion\"><strong>Conclusion<\/strong><\/h2>\n\n\n\n<p>Knowing the correct GST rates and HSN codes for soft drinks in restaurants helps both customers and businesses navigate the taxation landscape effectively. This guide provides a comprehensive overview of the applicable rates, ensuring compliance and clarity in billing.&nbsp;<\/p>\n\n\n\n<p class=\"has-ast-global-color-4-background-color has-background\">\ud83d\udca1Facing delays in GST payment? Get started with&nbsp;<a href=\"https:\/\/piceapp.com\/\" target=\"_blank\" rel=\"noreferrer noopener\">PICE today<\/a>&nbsp;and streamline your GST payments. Click here to sign up and take the first step towards hassle-free GST management.<\/p>\n\n\n\n<h3 class=\"wp-block-heading\" id=\"faqs\"><strong>FAQS<\/strong><\/h3>\n\n\n<div id=\"rank-math-faq\" class=\"rank-math-block\">\n<div class=\"rank-math-list \">\n<div id=\"faq-question-1720761315133\" class=\"rank-math-list-item\">\n<h3 class=\"rank-math-question \"><strong>What is the GST rate for soft drinks in non-AC restaurants?<\/strong><\/h3>\n<div class=\"rank-math-answer \">\n\n<p>The GST rate for soft drinks served in non-AC restaurants is 5%. This lower rate is designed to keep costs down for consumers in more casual dining settings. However, it&#8217;s important to note that restaurants charging this rate cannot claim Input Tax Credit (ITC).<\/p>\n\n<\/div>\n<\/div>\n<div id=\"faq-question-1720761323942\" class=\"rank-math-list-item\">\n<h3 class=\"rank-math-question \"><strong>How does the GST rate differ for soft drinks in AC restaurants?<\/strong><\/h3>\n<div class=\"rank-math-answer \">\n\n<p>In air-conditioned (AC) restaurants, the GST rate for soft drinks is 18%. This higher rate applies regardless of whether the restaurant serves alcohol or not. AC restaurants can claim Input Tax Credit (ITC), allowing them to offset the tax paid on inputs against their GST liability.<\/p>\n\n<\/div>\n<\/div>\n<div id=\"faq-question-1720761330742\" class=\"rank-math-list-item\">\n<h3 class=\"rank-math-question \"><strong>Are there additional taxes on carbonated beverages apart from GST?<\/strong><\/h3>\n<div class=\"rank-math-answer \">\n\n<p>Yes, apart from the GST, carbonated beverages are subject to an additional compensation cess as per Notification No. 01\/2021-Compensation Cess (Rate). This cess increases the overall tax burden on carbonated drinks, potentially leading to higher retail prices and impacting consumer demand.<\/p>\n\n<\/div>\n<\/div>\n<div id=\"faq-question-1720761337142\" class=\"rank-math-list-item\">\n<h3 class=\"rank-math-question \"><strong>What HSN code should be used for classifying soft drinks for GST purposes?<\/strong><\/h3>\n<div class=\"rank-math-answer \">\n\n<p>Soft drinks, including aerated and carbonated beverages, fall under the HSN code 2202. This classification is essential for ensuring accurate tax rates are applied and for maintaining proper compliance with GST regulations.<\/p>\n\n<\/div>\n<\/div>\n<div id=\"faq-question-1720761345646\" class=\"rank-math-list-item\">\n<h3 class=\"rank-math-question \"><strong>How does the GST rate on tender coconut water differ from other beverages?<\/strong><\/h3>\n<div class=\"rank-math-answer \">\n\n<p>Tender coconut water is taxed at a lower GST rate of 12% under the HSN code 2202. This rate is more favorable compared to the 18% or 28% rates applied to other non-alcoholic beverages, making tender coconut water a more affordable and healthier choice for consumers.<\/p>\n\n<\/div>\n<\/div>\n<\/div>\n<\/div>","protected":false},"excerpt":{"rendered":"<p>Key Takeaways Soft drinks, often referred to as aerated drinks, are popular items on restaurant menus. Understanding the GST rates and HSN codes applicable to these beverages can help restaurant owners and customers ensure compliance and proper billing. Handle all your sales and purchase invoices in one place.Pice\u2019s all-in-one invoice management tool helps you track, [&hellip;]<\/p>\n","protected":false},"author":8,"featured_media":13746,"comment_status":"closed","ping_status":"closed","sticky":false,"template":"","format":"standard","meta":{"footnotes":""},"categories":[12],"tags":[],"class_list":["post-13704","post","type-post","status-publish","format-standard","has-post-thumbnail","hentry","category-gst"],"_links":{"self":[{"href":"https:\/\/piceapp.com\/blogs\/wp-json\/wp\/v2\/posts\/13704","targetHints":{"allow":["GET"]}}],"collection":[{"href":"https:\/\/piceapp.com\/blogs\/wp-json\/wp\/v2\/posts"}],"about":[{"href":"https:\/\/piceapp.com\/blogs\/wp-json\/wp\/v2\/types\/post"}],"author":[{"embeddable":true,"href":"https:\/\/piceapp.com\/blogs\/wp-json\/wp\/v2\/users\/8"}],"replies":[{"embeddable":true,"href":"https:\/\/piceapp.com\/blogs\/wp-json\/wp\/v2\/comments?post=13704"}],"version-history":[{"count":1,"href":"https:\/\/piceapp.com\/blogs\/wp-json\/wp\/v2\/posts\/13704\/revisions"}],"predecessor-version":[{"id":72003,"href":"https:\/\/piceapp.com\/blogs\/wp-json\/wp\/v2\/posts\/13704\/revisions\/72003"}],"wp:featuredmedia":[{"embeddable":true,"href":"https:\/\/piceapp.com\/blogs\/wp-json\/wp\/v2\/media\/13746"}],"wp:attachment":[{"href":"https:\/\/piceapp.com\/blogs\/wp-json\/wp\/v2\/media?parent=13704"}],"wp:term":[{"taxonomy":"category","embeddable":true,"href":"https:\/\/piceapp.com\/blogs\/wp-json\/wp\/v2\/categories?post=13704"},{"taxonomy":"post_tag","embeddable":true,"href":"https:\/\/piceapp.com\/blogs\/wp-json\/wp\/v2\/tags?post=13704"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}