The Indian Beverage Association (IBA) has urged the government to slash the Goods and Services Tax (GST) on aerated drinks from the current 28% plus 12% compensation cess to a flat 18% under the proposed new GST regime.
The industry body, which represents leading players such as Coca-Cola, PepsiCo, Reliance, Bisleri, Dabur, and Red Bull, said the move would make non-alcoholic beverages more affordable for mass consumers, drive investments, and generate 1.2 lakh new jobs annually by 2030.
Highlighting the sector’s contribution to the economy, the IBA stated that the non-alcoholic beverages industry was valued at USD 49.6 billion in 2023 and is projected to reach USD 64 billion by 2028. The sector has already invested ₹50,000 crore in recent years and plans to invest an additional ₹85,000 crore.
“Rationalized GST rates will unlock the sector’s true potential—spurring investment, supporting farmers, and ensuring inclusive growth,” the association said in a statement.
IBA also emphasized the industry’s role in strengthening the agrarian supply chain, noting its large-scale procurement of commodities like sugar and mangoes from Indian farmers.
With 71% of beverage transactions priced at ₹20 or less, the association argued that high taxation disproportionately impacts affordability, particularly among the 65% of consumers belonging to lower socio-economic classes.
The appeal comes as the government considers shifting to a simplified two-slab GST structure of 5% and 18%, with a special 40% rate reserved for ultra-luxury and sin goods.