Coca-Cola To Keep Price Of Its Soft Drink Basket Unchanged Despite GST Hike

Hindustan Coca-Cola Beverages Pvt. Ltd. is likely to retain the retail prices of its entire beverage portfolio ahead of Sept. 22, when the GST rate changes take effect.

The maker of popular local brand 'Thums Up', besides Coca-Cola, Sprite, Fanta, Limca, Minute Maid, and Maaza, will absorb the GST rate differential to pass on the benefit to consumers, industry sources told NDTV Profit.

The company is unlikely to change the prices of aerated, carbonated and sugary drinks. The price of packaged drinking water Kinley will be slashed soon, sources indicated.

The GST Council on Sept. 3 moved carbonated, caffeinated and energy drinks (non-alcoholic drinks) to a hefty 40% GST from the current 28%.

Finance Minister Nirmala Sitharaman noted that carbonated fruit drinks and similar beverages were previously taxed at 28% with an additional compensation cess. Now, the cess has been withdrawn and the tax rate has been increased to 40% to maintain the effective burden at earlier levels.

The new 40% special GST rate is likely to apply to Hindustan Coca-Cola's fruit juice categories, including Minute Maid and Maaza.

The GST on 20-litre bottled water will be reduced from 12% to 5%.

The Council also applied the 40% slab to 'other non-alcoholic beverages', in line with their broader principle of keeping similar products under the same rate category. This measure aims to prevent ambiguity in classification and provide clarity for both businesses and tax authorities.

These rejig are part of the larger GST rationalisation exercise, which reduces the four-tier system (5%, 12%, 18%, 28%) to just two slabs – 5% and 18%, with a special 40% rate for sin and luxury goods.