Non-alcoholic beverages such as mojito, rose lemonade, cucumber mint will attract 40 per cent GST, West Bengal’s Authority for Advance Ruling has said. However, iced tea preparation & extracts, essences and concentrates of tea, along with syrups and beverage concentrates, will be taxed at 5 per cent.
“Ready-to-drink non-alcoholic beverages such as mojito, rose lemonade, cucumber mint, and lychee vitamin water do not contain any fruit pulp or fruit juice. As such, they cannot be covered by tariff item no. 22029920 of the Customs Tariff Act, 1975, which pertains to ‘fruit pulp or fruit juice-based drinks’. The said non-alcoholic beverages are covered by tariff heading no. 2202, which includes waters- such as mIneral waters and aerated waters containing added sugar or other sweetening matter or flavouring, and other non-alcoholic beverages, excluding fruit, nut or vegetable juices of Heading 2009,” it said.
Further, it said that syrups and beverage concentrates – ginger lime, raw mango, lemon mint, etc. are liquid concentrates intended to be consumed after dilution with water. They are classifiable under 21069019 and are liable to GST at 5 per cent.
It may be noted that though an AAR ruling is applicable only for applicant and the concerned tax authority, still it can be relied upon in similar matters. Also, many policy changes are based on AAR rulings, showing their significance.
The Applicant, Kolkata based Sage Organics is engaged in the manufacture and supply of various non-alcoholic beverages and related preparations, including iced tea, syrups, concentrates such as ginger lime, raw mango, orange electrolytes, and ready to drink beverages such as mojito, rose lemonade, and lavender honey. It contended that these products are processed food/beverage items for human consumption and not ‘luxury’ or ‘sin’ goods.
“The products are sugar free, health-oriented beverage preparations and are marketed as alternatives to high sugar drinks. Accordingly, they are eligible to be considered under Schedule II of the GST rate notifications and not under Schedule III,” it said. Post GST rate restructuring, Schedule II refers to an 18 per cent rate, while Scheduled III comprises goods with a 40 per cent rate. In its submission, Tax Department opined that non-alcoholic beverages should be taxed at 40 per cent, iced tax and syrups at 5 per cent and beverage concentrates accordingly.
According to Harpreet Singh, Partner (Indirect Tax) at Deloitte, the recent AAR ruling underscores a significant disparity in GST rates for non-alcoholic beverages, with ready-to-drink options facing a steep 40 per cent tax despite not being classifified as ‘sin goods’. “This highlights an urgent need for policymakers to revisit and rationalize the GST framework to better reflect the nature of these products and evolving consumer preferences,” he said.
Published on March 5, 2026