The Indian Beverage Association on Wednesday expressed concerns about high taxation levels on the aerated beverages segment terming it as a bottleneck for the growth of the industry.  This comes amidst speculation that a Group of Ministers (GoM) on rate rationalisation has recommended increasing GST on sin goods including soft drinks and tobacco to 35 per cent.

The industry was instead hoping that with the GST compensation cess scheduled to end in 2026, the aerated beverages will get taxed at 28 per cent. Currently, all kinds of aerated beverages, irrespective of sugar content, attract GST of 40 per cent, which includes 12 per cent cess. 

Speaking at an event on Wednesday, C K Jaipuria, Vice Chairman, Indian Beverage Association said, “ Taxation remains the biggest bottleneck for the aerated beverage sector. We cannot afford even half a percent increase and have been urging for relief. We are hoping that in March of 2026 , when the 12 per cent cess goes away, we can come back to 28 per cent level. While the industry continues to expand, there is a lot of price-consciousness in the market. Growth is there, but it is in single digits.”

Immense representations

“ We have even zero-sugar products being taxed at 40 per cent today. We have made immense representations to the GST Council and others authorities but taxation remains a challenge for us at all levels,” he added.

Besides seeking reduction in GST , the beverage industry body has in the past been also urging the government that soft drinks with moderate, low sugar or zero sugar should be taxed at lower slabs.

Reacting to the speculations around the proposed 35 per cent tax slab, J P Meena, Secretary General, Indian Beverage Association said, “ The reported 35 per cent tax slab will put a burden on the industry in bringing in more investments. But if the cess is taken away then there is likelihood of the industry to expand and bring new investments.”

Meanwhile, the Finance Ministry in a statement on Tuesday had said that reports in the media on the basis of the Group of Ministers deliberations on changes in GST rates were “premature and speculative.” It also said that the GST Council has not yet deliberated on any GST rate changes.

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