At its 56th meeting, the GST Council increased the tax on carbonated and caffeinated drinks as well as other sweetened and flavored beverages from 28% to 40%. This change may have an impact on the products of firms like Coca-Cola, Pepsi, Nestlé, Dabur, and Tata Consumer. Announced late on September 3, the sharp rise will go into effect on September 22. The high 40% GST will now apply to products including carbonated fruit drinks, fruit juice-based fizzy drinks, non-alcoholic flavoring drinks, and any aerated waters with added sugar or sweeteners.
This occurs concurrently with the Indian Beverage Association (IBA) pleading with the government to exclude fizzy drinks from the category of sin goods. To distinguish between fruit and low-sugar/no-sugar varieties, the industry group had suggested a sugar-based taxing scheme that was in line with international standards. Leading companies like Coca-Cola, Pepsico, Reliance, Bisleri, Dabur, and Red Bull are members of the Indian Beverage Association (IBA), which represents the country’s non-alcoholic beverage market. With a compound annual growth rate (CAGR) higher than the global average, the non-alcoholic beverage industry is predicted by the IBA to be worth USD 49.6 billion in 2023 and USD 64 billion by 2028. Taxes on plant-based milk beverages that are ready for direct consumption have been lowered from 12% to 5%.
