The Government has revised GST tariff classifications for several beverage products under HSN Heading 2202 through Notification No. 01/2026-Integrated Tax (Rate) dated 30 April 2026. The amendment aligns GST schedules with changes introduced under the Finance Act, 2026 and became effective from 1 May 2026.

Businesses dealing in beverages, soft drinks, fruit-based drinks, and ready-to-drink products should carefully review the revised HSN mapping to ensure correct GST compliance.

Key Changes Introduced

As per Notification No. 01/2026-IGST (Rate) dated 30-04-2026:

• Several HSN codes under the 2202 series have been revised and aligned with updated customs tariff classifications.
• Amendments have been made in:
  • Schedule I (5% GST), and
  • Schedule III (40% GST including higher rate categories).

The notification broadly impacts:

1. Non-alcoholic beverages
2. Fruit-based drinks and juice-based beverages
3. Aerated and flavoured drinks
4. Ready-to-drink beverages

GST Rates Applicable

Products Covered Under Lower GST Slab

Certain beverages classified under revised Schedule I entries continue to attract:

• 5% GST under IGST structure
  • Equivalent to:
    • 2.5% CGST + 2.5% SGST

These generally include specified:

• Fruit pulp or fruit juice-based drinks,
• Certain milk-based beverages,
• Selected non-carbonated beverage products.

Products Attracting Higher GST

The notification also aligns entries under Schedule III relating to:

• Aerated beverages,
• Sweetened carbonated drinks,
• Certain caffeinated or flavoured beverages.

Such products may attract:

• 28% GST plus Compensation Cess,
• Resulting in an effective tax incidence of up to 40%.

This higher rate structure generally applies to:

• Carbonated soft drinks,
• Sweetened aerated beverages,
• Energy and caffeinated drinks falling under specified HSN codes.

Why This Amendment is Important

The amendment is primarily aimed at:

• Harmonising GST tariff schedules with revised customs tariff classifications;
• Reducing classification disputes;
• Improving uniformity in GST treatment of beverage products.

Incorrect HSN classification may result in:

• Short payment of GST,
• Interest and penalty exposure,
• Input Tax Credit mismatches,
• Litigation during departmental audits.

Compliance Action Points for Businesses

Manufacturers, traders, restaurants, distributors, and FMCG businesses dealing in beverages should immediately:

• Review existing HSN codes used in invoices and GST returns;
• Verify whether products fall under revised Schedule I or Schedule III;
• Update ERP, billing, and accounting software;
• Reassess pricing structures where higher GST applies;
• Ensure proper disclosure in GSTR-1 and GSTR-3B filings.

Official Reference

The amendment has been issued through:

• Notification No. 01/2026-Integrated Tax (Rate) dated 30 April 2026;
• Corresponding amendments under Central Tax (Rate) notifications were also issued for CGST alignment.

The changes are effective from 1 May 2026.

Conclusion

The revised HSN classification for beverages under GST is an important compliance update for businesses operating in the food and beverage sector. Correct product classification and tax rate application are essential to avoid future disputes and ensure smooth GST compliance.

For expert guidance on this topic, contact your tax professional today.