02/05/2026
GST Rate Changes for Beverages Effective May 1, 2026
The change clearly separates beverage products into different tax categories, so businesses must apply the correct GST rate and update their systems to avoid errors.
The Ministry of Finance (Department of Revenue) through Notification dated April 30, 2026 has announced changes in GST rates for certain beverage categories under HSN 2202. Parallel notifications have also been issued under Central GST (CGST) and Union Territory GST (UTGST). These changes will come into effect from May 1, 2026. This notification does not introduce new tax rates. Instead, it clarifies and updates the classification of beverages under existing GST slabs. Since GST rates depend on HSN codes, proper classification is essential to ensure correct tax application.
What has changed?
The government has reassigned specific HSN codes into different tax brackets: Lower GST Rate (Concessional) HSN: 2202 99 21, 2202 99 29, 2202 99 31, 2202 99 39 Tax: 5% IGST (or 2.5% CGST + 2.5% UTGST) Higher GST Rate HSN: 2202 99 90, 2202 99 91, 2202 99 99 Tax: 40% IGST (or 20% CGST + 20% UTGST)
This difference is important because it clearly separates beverages into lower tax and higher tax categories, which may depend on things like composition, branding, or type of product.
Clearly listing the HSN codes, the government is making sure that businesses apply correct tax rate without depending on guess or assumption. For businesses dealing in beverages, like manufacturers, importers, distributors, and retailers, this change has direct compliance impact. They will need to check their product classification, update billing systems and make sure invoices show correct GST rates from May 1, 2026. Any mistake can lead to wrong tax payment, denial of input tax credit or issues during audits.
