Hope govt brings down tax burden on aerated beverages category: IBA

The Indian Beverage Association (IBA) on Wednesday said it hopes the 12 per cent cess on the carbonated beverages category will be waived in 2026, bringing down the tax on the category to 28 per cent.  This statement follows reports on Tuesday suggesting that a Group of Ministers (GoM) on rate rationalisation had proposed an increase in Goods and Services Tax (GST) on ‘sin’ items such as aerated beverages and tobacco to 35 per cent.  Currently, aerated beverages, regardless of their sugar content, attract a 28 per cent GST—the highest slab—along with a compensation cess of 12 per cent. This takes the total tax burden on the category to 40 per cent.  “Even zero-sugar products are taxed at 40 per cent. We have made representations to all levels of the government, but taxation remains a bottleneck for us,” said CK Jaipuria, chairman, IBA.  However, later on Tuesday, the Central Board of Indirect Taxes and Customs (CBIC) termed these reports as “premature and speculative.”  “There should be a scientific reason behind the GST rates. If sugar is the problem, all sugary products should attract a higher slab. The tax structure is an impediment to investment in the industry,” JP Meena, secretary general, IBA, told Business Standard.