This guide provides an in-depth analysis of GST rates and HSN codes for coffee, tea, mate, and spices under Chapter 9. Stay informed about the latest tax implications for FY 2025-26.
GST Rates & HSN Codes Overview
Detailed GST Rates for Coffee
Detailed GST Rates for Tea
Detailed GST Rates for Spices
FAQs on GST for Coffee, Tea, and Spices
An overview of the GST rates and HSN codes applicable to coffee, tea, mate, and spices under Chapter 9.
Understanding HSN Codes
HSN codes are used to classify goods under GST. Each product has a unique code that determines its tax rate.
HSN Code 0901: Coffee, whether or not roasted or decaffeinated.
HSN Code 0902: Tea, whether or not flavored.
HSN Code 0903: Mate.
GST Rate Categories
GST rates for coffee, tea, and spices vary based on their processing and form.
5% GST on unprocessed coffee beans.
0% GST on unflavored green tea.
5% GST on processed spices like cardamom and cinnamon.
Effective Dates and Revisions
GST rates have been in effect since July 1, 2017, with periodic revisions.
Initial implementation date: 01/07/2017.
Latest revision for coffee: 01/07/2017.
No cess applicable on these items.
Impact on Businesses
Understanding GST rates helps businesses in pricing and compliance.
Accurate tax calculation for invoicing.
Helps in maintaining compliance with tax laws.
Influences pricing strategies for competitive markets.
A detailed look at GST rates applicable to various forms of coffee.
Unroasted Coffee
Unroasted coffee beans are taxed at a lower rate to promote raw material trade.
5% GST on Arabica Plantation A Grade.
5% GST on Robusta Cherry AB Grade.
0% GST on coffee husks and skins.
Roasted Coffee
Roasted coffee attracts a higher GST rate due to added processing.
5% GST on roasted coffee beans.
5% GST on decaffeinated roasted coffee.
5% GST on coffee substitutes containing coffee.
Worked Example: GST Calculation
Calculate the GST on a ₹10,000 purchase of unroasted Arabica Plantation A Grade coffee.
Purchase amount: ₹10,000.
GST rate: 5%.
Total GST: ₹500 (₹10,000 x 5%).
Import and Export Considerations
GST implications on imported and exported coffee.
IGST applicable on imports.
Exports are zero-rated under GST.
Input tax credit available for exporters.
Explore the GST rates applicable to various forms of tea.
Unflavored Green Tea
Unflavored green tea is exempt from GST to promote health benefits.
0% GST on unflavored green tea.
5% GST on flavored green tea.
5% GST on black tea.
Flavored Tea
Flavored tea attracts GST due to additional processing.
5% GST on flavored black tea.
5% GST on flavored green tea.
5% GST on tea bags.
GST on Tea Blends
Tea blends are taxed based on their composition.
5% GST on herbal tea blends.
5% GST on fruit-infused teas.
5% GST on chai blends.
Market Impact
GST rates influence the pricing and consumption of tea.
Lower GST on unflavored tea boosts sales.
Higher GST on flavored tea affects pricing.
Market trends show a shift towards unflavored teas.
An analysis of GST rates applicable to various spices.
Common Spices
GST rates for commonly used spices.
5% GST on cardamom.
5% GST on cinnamon.
5% GST on black pepper.
Processed Spices
Processed spices attract GST due to added value.
5% GST on ground spices.
5% GST on spice mixes.
5% GST on spice extracts.
GST on Exotic Spices
Exotic spices may have different GST implications.
5% GST on saffron.
5% GST on vanilla.
5% GST on nutmeg.
Supply Chain Considerations
GST impacts the supply chain of spices.
Input tax credit available for manufacturers.
GST compliance affects pricing strategies.
Supply chain efficiency can reduce GST impact.
What is the GST rate for unroasted coffee beans?
The GST rate for unroasted coffee beans is 5%. This rate applies to various grades of Arabica and Robusta coffee beans.
Is there any GST on unflavored green tea?
No, unflavored green tea is exempt from GST. This exemption is intended to promote the consumption of health-beneficial teas.
How is GST calculated on processed spices?
Processed spices attract a GST rate of 5%. For example, if you purchase processed spices worth ₹20,000, the GST would be ₹1,000 (₹20,000 x 5%).
Are exports of coffee and tea subject to GST?
No, exports of coffee and tea are zero-rated under GST. Exporters can claim input tax credit on the GST paid on inputs.
What is the HSN code for black tea?
The HSN code for black tea is 0902. This code is used for classification and determining the applicable GST rate.
Can businesses claim input tax credit on GST paid for coffee imports?
Yes, businesses can claim input tax credit on the IGST paid for coffee imports, which helps reduce the overall tax liability.
What is the GST rate for flavored tea?
Flavored tea, including flavored green and black tea, attracts a GST rate of 5%. This rate applies to both loose and packaged tea.
How does GST impact the pricing of spices?
GST impacts the pricing of spices by adding a 5% tax on processed and exotic spices. Businesses must factor this into their pricing strategies.
Is there any cess applicable on coffee, tea, or spices?
No, there is no cess applicable on coffee, tea, or spices under the current GST regime for FY 2025-26.
How do GST rates affect the supply chain of tea?
GST rates affect the supply chain of tea by influencing input costs and pricing strategies. Efficient supply chain management can help mitigate GST impact.