Thu Sep 04 11:15:11 UTC 2025: **Summary:**

The GST Council has reduced the GST on coffee from 18% to 5%, effective September 22nd, a move widely praised by the Indian coffee industry. Industry leaders believe this will lower costs for consumers, boost domestic consumption, level the playing field for various coffee businesses, encourage innovation, and strengthen India’s position in the global coffee market. While retailers with existing inventory may face short-term challenges, the long-term benefits for consumers and the overall economy are expected to be significant.
**News Article:**

**Coffee Prices Set to Plunge as GST Cut Brews Delight for Indian Consumers**

**Bengaluru, September 4, 2025** – Coffee lovers across India can rejoice as the government has slashed the Goods and Services Tax (GST) on coffee from 18% to a mere 5%, effective September 22nd. The move, unanimously welcomed by the coffee industry, is expected to make the popular beverage significantly more affordable and accessible to the masses.

“This is a progressive step that will directly benefit consumers and the entire industry,” said Rajat Agarwal, CEO of Barista Coffee. He highlighted that the reduction would lower sourcing costs and boost consumer spending.

Rana George, MD of Kelachandra Coffee, echoed this sentiment, stating that the GST reduction will have a positive impact from “farm to cup,” fostering domestic consumption and opening new avenues for market growth.

The revised tax regime isn’t limited to brewed coffee; related products like roasted chicory and coffee substitutes will also fall under the 5% GST slab, according to Harpreet Singh, Partner, Indirect Tax at Deloitte India. While some retailers may face short-term challenges managing inventory purchased at higher rates, the overall impact is expected to be overwhelmingly positive.

“Lower taxes mean greater affordability, which will drive wider consumption, particularly during the festive season,” noted Praveen Jaipuriar, CEO of CCL Products (Continental Coffee). “This aligns with the vision of inclusive growth, ensuring that everyday indulgences like coffee remain within reach for every consumer.”

Industry experts predict that this move will not only boost household sentiment but also contribute to overall economic growth by increasing consumption, which forms a crucial part of India’s GDP.

Srikanth Rao, Director of Bayars Coffee, emphasized that the affordability of instant coffees and coffee liquids in supermarkets would drastically improve for consumers.

Vikram Khurana, CEO of Kaapi Solutions, believes the GST cut will further accelerate the growth of coffee as a preferred beverage among India’s youth and urban consumers, enabling cafés, roasters, and retailers to invest in quality, innovation, and customer experience.

The government’s decision is being hailed as a catalyst for nurturing India’s vibrant coffee culture and strengthening its position in the global coffee market.

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