Do you start your mornings with a potent dose of caffeine from a freshly brewed cup of Joe? Or do you prefer a slightly less caffeinated nudge from a warm and gentle cup of tea?
Whatever your preference, how do coffee and tea compare in a head-to-head matchup? We looked at the research, and here’s what we found. Tea and coffee are two of the most consumed beverages in the world, and their popularity also extends to India.
An important aspect of taxation that affects one of our beloved daily essentials is taxability on Tea and Coffee.
The GST Council HSN code and GST rate for all types and qualities of tea, coffee and spices introduced tea, Coffee and Spices.
Further, mixtures of the products of headings 0904 to 0910 are to be classified as follows:
- Mixtures of two or more of the products of the same heading are to be classified in that heading;
- Mixtures of two or more of the products of different headings are to be classified in heading 0910.
Purpose of HSN Code
Consumer Benefits:
GST benefits consumers by reducing the overall tax burden on goods and services. While the final impact on prices depends on various factors, the intention is to make goods and services more affordable for consumers.
Uniformity:
GST aims to create a uniform tax rate structure across the country, promoting fairness and reducing regional disparities in taxation.
Nurture Transparency:
GST operates on a digital platform where transactions and returns are recorded electronically. This promotes tax collection transparency and reduces tax evasion and fraud opportunities.
Eliminating Tax Cascading:
Under the previous tax regime, taxes were levied at multiple stages of production and distribution, leading to tax on taxation or tax cascading. GST eliminates this issue by allowing businesses to claim input tax credit for taxes paid on inputs, ensuring that taxes are only levied on the value added at each stage and eliminating the cascading effect.
List of GST State Codes
When a taxpayer registers for GST, they are given a 15-digit alphanumeric unique identification number known as the Goods and Services Tax Identification Number (GSTIN). The GSTIN’s first two numbers denote the state code.
Taxpayers utilise the GST state code list while registering for GST and entering invoice data into GST returns.
| HSN Code | Description | GST Rate | IGST | CGST | SGST | CESS |
| 901 | Coffee, whether or not it has been roasted or decaffeinated; coffee husks and skins; and coffee replacements that contain coffee in any amount other than unroasted coffee beans. | 5 | 5 | 2.5 | 2.5 | 0 |
| 902 | Tea, whether or not flavored other than unprocessed green leaves of tea. | 5 | 5 | 2.5 | 2.5 | 0 |
| 903 | Maté | 5 | 5 | 2.5 | 2.5 | 0 |
| 904 | Piper genus pepper; dried, crushed, or ground fruits from the Capsicum or Pimenta genus | 5 | 5 | 2.5 | 2.5 | 0 |
| 905 | Vanilla | 5 | 5 | 2.5 | 2.5 | 0 |
| 906 | Cinnamon and cinnamon-tree flowers | 5 | 5 | 2.5 | 2.5 | 0 |
| 907 | Cloves (whole fruit, cloves and stems) | 5 | 5 | 2.5 | 2.5 | 0 |
| 908 | Nutmeg, mace and cardamoms | 5 | 5 | 2.5 | 2.5 | 0 |
| 909 | seeds from juniper berries that are not of seed quality, such as those from anise, badian, fennel, coriander, cumin, or caraway. | 5 | 5 | 2.5 | 2.5 | 0 |
| 0910 [other than 0910 11 10, 0910 30 10] | Saffron, turmeric (curcuma) other than fresh turmeric, ginger other than fresh ginger, thyme, bay leaves, curry, and other spices | 5 | 5 | 2.5 | 2.5 | 0 |
| 07, 09 or 10 | All goods of seed quality | 0 | 0 | 0 | 0 | 0 |
| 901 | Coffee beans, not roasted | 0 | 0 | 0 | 0 | 0 |
| 902 | Unprocessed green leaves of tea | 0 | 0 | 0 | 0 | 0 |
| 909 | Caraway, fennel, coriander, cumin, badian, anise, and juniper berries [of seed quality] | 0 | 0 | 0 | 0 | 0 |
| 0910 11 10 | Rather than being processed, fresh ginger | 0 | 0 | 0 | 0 | 0 |
| 0910 30 10 | Other than in processed form, fresh turmeric | 0 | 0 | 0 | 0 | 0 |
| 12 | Everything is of seed quality. | 0 | 0 | 0 | 0 | 0 |
The Bottom Line
It’s essential for businesses to correctly determine and apply the appropriate HSN code to their products to ensure accurate taxation. The HSN code is typically included in invoices and other relevant documents for GST compliance.
Businesses must be aware of the HSN codes applicable to their products, as these codes determine the tax rates and other regulatory requirements associated with them.
Frequently Asked Questions:
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What is the full HSN code of tea?
HSN Code 0902- Tariff Classification of – Tea, whether or not flavoured
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What is the HSN code for tea powder?
Tea powder and HSN Code 21012010 Exports from India.
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How Is GST Calculated?
GST is calculated by multiplying the value of the goods or services by the applicable GST rate. The formula for calculating GST is as follows:
GST Amount = (Value of Goods or Services) × (GST Rate/100)
The GST amount is the tax portion that needs to be added to the value of the goods or services.
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What is the GST on Starbucks in India?
The National Anti-Profiteering Authority has fined Starbucks Rs 1.04 crore plus 18% interest for not passing on the benefit of a reduction in the goods and services tax rate from 18% to 5% to consumers between November 2017 and June 2018. Starbucks was also directed to reduce the prices of its products.
