By Sunita D
The Goods and Services Tax (GST) Council of India, comprising the Centre and the States, has revamped the existing tax rates on goods and services, coming into effect from, September 22, 2025.
The earlier pattern of GST in India was levied in four slabs: 5%, 12%, 18%, and 28%, which has now been updated into a ‘two-tier’ tax system wherein commodities sold in the nation will fall under the tax bracket of 5% or 18%, depending on their nature. Under this new GST structure, the highest GST bracket is 18%. However, a special 40% GST slab has been introduced to replace the mandatory Compensation Cess charges on certain items to make up for the revenue loss states face.
Here are the items that will carry the highest GST tax from today:
- Sin Goods: Items which are generally considered harmful to health and society are termed ‘Sin Goods’. These products include cigarettes, pan masala, beedi, and other tobacco products like gutka, and online gaming and gambling will be taxed at a 40% GST rate starting today.
- Luxury Cars: Four-wheelers with an internal combustion engine (ICE) capacity of more than 1,200 cc and a length exceeding 4 metres will be carrying 40% GST tax as per the GST Council. Earlier, SUVs or MPVs, which fell under this category, carried a 28% GST rate and a 22% cess charge on top of the ex-showroom price.
- Above 350cc two-wheelers: The GST Council has increased the GST tax on two-wheelers with a 350cc+ engine category from 28% to 40%. Even though the cess charge of 3% has been removed, the price of the two-wheeler above the engine capacity of 350 cc will attract a higher tax rate from today.
- Soft drinks: Earlier, soft drinks and other non-alcoholic beverages were charged 28% GST. As per the new reform, all non-alcoholic beverages, including Coca-Cola, Pepsi, Mountain Dew, Fanta, and flavoured waters, will see a price hike as the GST rate has been increased to 40%. This tax slab will include aerated sugary drinks, carbonated beverages, carbonated fruit drinks or carbonated beverages with fruit juice, among others.
- Other goods & services which will come under the 18% tax bracket: consumer durables, including refrigerators, air-conditioners, washing machines, beauty and grooming services at salons, restaurant dining, especially at premium air-conditioned outlets, premium smartphones and imported gadgets, will attract 18% GST starting today.