In modern usage you're right, 茶 is used as 'beverage'.
When the character was created (appears in Erya under 'plants', so a very early character), it referred to one of a number of 'bitter herbs,' and linguists think it might have sounded like 'rlya'.
The character is composed of the top part, 艹 (classically written as 艸), meaning 'herbaceous plant' and the bottom part, 余, which supplied the pronunciation 'lya'.
There are two modern characters that come out of this, 茶 (cha) and 荼 (tu); the first one is used for tea/beverage, the second one has been borrowed a lot for its sound but at least one of its meanings is still 'bitter plant'.