Beverage association say taxation "a bottleneck at all levels"

Indian Beverage Association (IBA), which counts Coca-Cola, Dabur, PepsiCo, Reliance Consumer Products and RedBull as members, said it is “concerned” over a likely further increase in the goods and services tax (GST) rate on aerated drinks.

“We have zero-sugar products taxed at 40% today. We have made representations at all levels to the government, including to the GST Council, but taxation remains a bottleneck at all levels,” C.K. Jaipuria, chairperson of the IBA, said at a National Beverage Conclave on Wednesday.

According to media reports earlier this week, a group of ministers (GoM) has recommended increasing GST rates on carbonated beverages, cigarettes and tobacco to 35%. As of now, all carbonated drinks are taxed at 28% and an added compensation cess of 12%, which takes the overall tax on the category to 40%.


Earlier on Tuesday, the Central Board of Indirect Taxes and Customs (CBIC) said news reports which said a ministerial panel has recommended changes in GST on select categories were “speculative”.

According to Jaipuria, the 12% cess on aerated beverages should be waived off, which would bring down the tax on the category to 28%. "We cannot afford even half a per cent increase. The biggest roadblock for the industry is the taxation structure and we are hoping that by March 2026 when the 12% cess goes away, we come back to the 28% level,” he said.