GST rate for coffee beans (unroasted)

[Prashanth G]

I would like to know whether coffee beans unroasted (HSN 0901) is NIL rated or EXEMPTED. If EXEMPTED, please share the notification details. Thanks in advance.

[YAGAY and SUN]

Under GST, the distinction between "Nil rated" and "Exempted" supply is critical. Nil-rated goods are taxable goods with rate 0%, whereas exempted goods are specifically covered by an exemption notification issued under section 11 of the CGST Act.

In the case of coffee beans (unroasted) falling under HSN 0901:

• As per the GST rate schedules, coffee beans, not roasted, are effectively subject to 0% GST.
• However, this 0% treatment is not merely "nil-rated" by classification, but is covered under exemption notifications, thereby making it an "exempt supply" in law.

Relevant Notification (Key Legal Position):

• Vide Notification No. 10/2025 - Integrated Tax (Rate) dated 17.09.2025, effective from 22.09.2025, unroasted coffee beans (HSN 0901) have been explicitly exempted from GST.

Conclusion (Our View):

• Prior to specific exemption entries, there was interpretational overlap due to schedule classification at 0%.
• Post the above notification, the position is clear that unroasted coffee beans are "exempted goods" and not merely nil-rated goods.
• Consequently, such supplies fall within the definition of "exempt supply" under section 2(47) of the CGST Act, triggering implications such as ITC restriction under section 17(2).

In summary:
Coffee beans (unroasted) under HSN 0901 are to be treated as EXEMPTED supplies (by notification), not just nil-rated, with Notification No. 10/2025-IT (Rate) being the governing exemption.

[Prashanth G]

Thanks a lot sir for detailed information..

[Pinnacle Tax Advisor]

coffee beans not roasted is exempted goods (serial no. 60 of Notification No. 02/2017-Central Tax (Rate)

 

[Prashanth G]

Thanks for the reply sir

AI Summary

Exempt supply treatment for unroasted coffee beans under GST affects classification and input tax credit restrictions.
Under GST, unroasted coffee beans under HSN 0901 are discussed as exempted goods rather than merely nil-rated goods. The distinction is that nil-rated goods are taxed at 0%, while exempt goods are covered by an exemption notification and constitute exempt supply under the CGST framework. The text also notes that this classification has compliance consequences, including restriction of input tax credit under section 17(2).