List Of Items That Will Be Under 40% GST Slab

New Delhi: The 56th GST Council meeting held on 3rd September 2025 in New Delhi has decided to increase taxes on sin goods and luxury items. The official press release shows that the new GST rates target products like pan masala, gutkha, cigarettes, aerated drinks, luxury cars, yachts, and private aircraft. The move is aimed at discouraging harmful consumption and taxing luxury use more.

The Goods and Services Tax Council has introduced a new 40% GST slab for sin and luxury goods, effective September 22. The government has decided to tax items deemed harmful or extravagantly indulgent at a higher rate. Here are the items that will fall under the 40% GST slab: 

Tobacco and Pan Masala Become Costlier

The GST Council increased the tax on pan masala from 28 percent to 40 percent. Gutkha and chewing tobacco products like zarda have also moved from 28 percent to 40 percent. Cigarettes, cigars, and other manufactured tobacco products have been placed in the same 40 percent slab.

Products like tobacco extracts, tobacco for inhalation, and reconstituted tobacco also now attract 40 percent GST. This marks a big jump from the earlier 28 percent rate.

An exception has been made for bidis. The GST on bidis has actually been reduced from 28 percent to 18 percent. The Council noted that bidis are largely produced in the unorganised sector, and the rate cut will provide relief to workers and small producers.

Aerated and Caffeinated Drinks

Soft drinks and aerated waters containing sugar or flavouring now face 40 percent GST instead of 28 percent. Caffeinated beverages such as energy drinks have also been moved to the 40 percent slab.

Carbonated fruit drinks or beverages mixed with fruit juice are now taxed at 40 percent, up from 28 percent earlier. Other non-alcoholic beverages not covered under natural mineral water also face a steep hike from 18 percent to 40 percent.

This makes all sweetened, aerated, and caffeinated drinks more expensive for consumers.

Luxury Cars and Motorbikes

The GST Council increased taxes on high-end vehicles. Motor cars with larger engine capacities and SUVs now fall under the 40 percent GST slab instead of 28 percent.

Motorcycles with engine capacity above 350cc are also placed in the 40 per cent category. This means bigger motorbikes, often purchased for leisure or premium use, will become more expensive.

Yachts and Private Aircraft

The Council has also decided to tax the luxury toys of the rich. Yachts and pleasure vessels are now charged at 40 percent GST compared to 28 percent earlier. Aircraft meant for personal use also face the same jump from 28 percent to 40 percent.