A project on

Impact of GST on Beverage Industry

By

Roll No. Name

18. Debojyoti (20BSPHH01C0346)
19 Ananya Nanda (20BSPHH01C0140)
20 Pranjal Ralhan (20BSPHH01C0889)
21 Simran Shah (20BSPHH01C1245)
22 Umang Goenka (20BSPHH01C1501)
23 Sadhika Gupta (20BSPHH01C1039)
 Introduction

• GST has been introduced in India on 01.07.2017

• alcoholic beverages such as whiskey, beer, etc. were not under GST purview
• Prohibition of ‘one market’
• A huge chunk of alco-beverages has been placed in highest tax bracket of 28%
• chemicals, colouring agents and other consumables will also suffer GST of 5-18%

https://twitter.com/hmtreasury/status/766167934062432256
 Pre- GST scenario in the sector

• Alcoholic beverages are considered the sunrise industry

• Increased alcohol consumption in rural areas
• Famous among the youth
• Public acceptance and rising incomes play a major role
• market size of more than 500 million Indian dollars in 2016
https://www.dartconsulting.co.in/market-news/non-alcoholic-beverages-in-india-how-
will-the-market-shape-for-non-alcoholic-beverage-segment-by-2020-in-india/
 Hurdles while implementing GST

• Alco-beverages had taxation all throughout

• GST council has gone through 33 meetings so far
• Improvisation is still happening everytime
• Inclusion of Alco-beverages in GST net can be done via:
1. Change in definition of ‘goods’
2. Change in provision relating to charging section – levy and collection of
GST
Taxes applicable for different products

https://banksifsccode.com/blog/what-is-gst/
 Beverage Industry Tax Rates
GST Rate for Alcohol
• All types of beverages, spirit and vinegar come under Chapter 22 of the HSN
code
• Various types of beverages, including juices and mineral water, are specified
• Alcoholic drinks - taxable at 18% GST rate
• Vinegar and substitutes for vinegar- taxable at 18% GST

GST Rate for Mineral Water

• Natural or artificial mineral water- 18% of GST
• Aerated Waters and not being added with other sweetening matter nor
flavoured products- 18% of GST
• Water [other than aerated, purified, mineral, distilled, medicinal, battery, ionic,
demineralized and water sold in sealed container]- no tax
GST Rate for Juices
• Toddy and Neera (Non-alcoholic) - exempt from GST.
• Soya milk drinks, fruit pulp or fruit juice-based drinks, beverages containing milk, tender
coconut water put up in unit container- 12% GST
• Other non-alcoholic beverages, caffeinated Beverages, aerated containing waters, added
other sweetening matter or sugar or flavored – 28% GST
• Aerated drinks - GST slab of 28% and levied a compensation-cess of 12%

GST Rate for Coffee and Tea

• Coffee, tea, spices and mate fall under chapter 9 of the HSN code.
• Items not taxable under GST under this category are as follows-
1. Seeds of coffee, tea and spices
2. Coffee beans (not roasted)
3. Unprocessed green leaves of tea
• Coffee (any form),substitutes containing coffee, tea, whether flavored or unflavored- 5% GST
 Impact on the Industry

• Limitation industry growth

• 0.7 million cases out of 340 million cases of sales volume- 2018
• 0.6 million cases out of 285.8 million cases- 2019
• Stranded taxes impact the margins
• Credit on transport and packaging can’t be claimed
• For glass bottles, the tax rate has gone up to 18% from 15%
Conclusion