New Delhi 29 Aug 2025: The Indian Beverage Association (IBA), which represents companies like Coca-Cola and PepsiCo, has requested the government to reduce GST on soft drinks and other beverages to 18%. At present, these beverages attract 28% GST along with an additional 12% cess applicable on demerit goods. Under the proposed comprehensive GST reforms, the government is considering restructuring GST into two slabs (5% and 18%). In addition, select items such as luxury cars and demerit goods will attract a special 40% rate. Currently, GST has four slabs – 5%, 12%, 18% and 28%.
The IBA stated that rationalizing GST for this sector would make products more affordable, increase investment, and create 1.2 lakh new jobs annually by 2030. Appreciating the government’s efforts for next-generation GST reforms, the IBA said that reclassification, rationalization of GST, and bringing this category under a standard GST rate would unlock the true potential of the sector, boosting investment, employment, farmer support, and inclusive growth for the Indian economy. Major companies like Coca-Cola, PepsiCo, Reliance, Bisleri, Dabur, and Red Bull are members of the IBA.
IBA further said, “Rationalizing GST rates could generate 1.2 lakh new jobs annually by 2030, further supporting rural livelihoods. In recent years, the sector has invested ₹50,000 crore and is planning an additional investment of ₹85,000 crore.”
Summary: The Indian Beverage Association has requested the government to lower GST on soft drinks from current slab to 18% for relief.