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Sugary Drinks Face 40% ‘Sin’ GST as Mithai Keeps 5% Rate Under GST 2.0

The overhaul takes effect on September 22 under a streamlined two-slab system, drawing criticism from health experts given India’s large diabetes burden and ICMR’s stricter sugar guidance.

Overview

  • The GST Council led by Finance Minister Nirmala Sitharaman moved colas, iced teas, energy drinks and other sugary beverages into a 40% luxury and sin slab.
  • Traditional sweets such as gulab jamun, kaju katli, rasgulla and halwa, along with refined sugar and sugar confectionery, will be taxed at 5%, down from 18%.
  • GST 2.0 consolidates rates into 5% and 18% slabs with a separate 40% category for sin and luxury goods, with changes scheduled to take effect on September 22.
  • Public-health context cited in coverage notes about 101 million people with diabetes and roughly 136 million who are pre-diabetic, alongside ICMR guidance to cap added sugar at 5% of daily calories.
  • Commentary from experts describes the split as inconsistent with health goals and recommends uniform sugar taxation, front-of-pack warnings and incentives for lower-sugar reformulation.