GST Update - Tax Changes on Beverages (HSN Revised)

By CMA Cheena • 19 May 2026 • 2 min read

Introduction The Central Board of Indirect Taxes and Customs (CBIC) has notified amendments to GST rates on beverages under Notification No. 01/2026–IGST (Rate) dated 30 April 2026, effective 1 May 2026. These changes impact classification under HSN 2202, covering a wide range of non-alcoholic and ready-to-drink beverages. Key Amendments Schedule I (5% IGST) Entries under Serial Nos. 150 and 151 have been substituted: • 2202 99 21, 2202 99 29 • 2202 99 31, 2202 99 39 These cover: • Non-alcoholic beverages • Fruit-based drinks and juices (excluding pure juice) • Flavoured and ready-to-drink beverages Schedule III (40% IGST + Compensation Cess) Entries under Serial Nos. 2 and 3 have been revised to include: • 2202 91 00, 2202 99 91, 2202 99 99 These primarily cover: • Aerated beverages • Sweetened drinks • Certain flavoured carbonated products This alignment ensures parity across IGST, CGST, and UTGST notifications. Implications for Businesses • Higher Tax Burden: Aerated and sweetened beverages may now attract 40% GST plus Compensation Cess, significantly increasing costs. • Compliance Updates: Businesses must revise HSN classification in ERP and invoicing systems. • Pricing Strategy: FMCG and hospitality sectors should reassess pricing and margins to absorb or pass on the tax hike. • Return Filing: Ensure accurate reporting in GST returns to avoid penalties. Conclusion This notification marks a significant shift in beverage taxation under GST. Companies dealing in non-alcoholic and aerated drinks must act swiftly to update compliance systems, review pricing, and prepare for higher tax outflows.