Complete List of Goods Under GST 40 Percent Sin Tax: The government has introduced a new 40% Goods and Services Tax (GST) slab, the highest in the regime, for “sin goods” and certain luxury items. The announcement was made by Union Finance Minister Nirmala Sitharaman as part of the new GST reforms, which also reduced taxes for most goods to 5% and 18%.
Sin goods are products considered harmful to health or society, such as tobacco, gutka, pan masala, and alcoholic or sugary drinks. Governments across the world often impose higher taxes on such products to discourage use while raising money for public welfare.
In India, these goods have always attracted the highest tax rates, earlier set at 28% plus Compensation Cess. Since the cess is being phased out, the same tax burden has now been merged into a single 40% GST slab.
The new slab is called a “special rate” because it applies only to a small list of goods, mainly sin goods and super-luxury products. Without this reform, the removal of cess would have lowered tax collections on these items. By shifting to 40% GST, the government keeps revenue stable while continuing to discourage harmful consumption.
Complete List of Goods Under GST 40 Percent Sin Tax
The following goods will now attract the highest GST rate:
- Pan masala
- Cigarettes
- Gutka
- Chewing tobacco
- Unmanufactured tobacco and tobacco refuse
- Cigars, cheroots, cigarillos
- Tobacco substitutes
- Aerated drinks
- Carbonated beverages (including fruit-based)
- Caffeinated beverages
- Cars larger than 1,200 cc (petrol) or 1,500 cc (diesel)
- Motorcycles above 350 cc
- Yachts
- Aircraft for personal use
- Racing cars
- Online gambling and gaming platforms
Most of these items were already under the 28% slab plus Compensation Cess, effectively taking the tax burden close to 40%.
1. Tobacco and Pan Masala (Sin Goods)
- Pan masala
- Gutka
- Chewing tobacco
- Unmanufactured tobacco and tobacco refuse (excluding leaves)
- Cigarettes
- Cigars, cheroots, cigarillos, and similar substitutes
2. Aerated and Sugary Beverages
- Carbonated drinks
- Cold drinks with sugar
- Caffeinated carbonated beverages
3. Luxury Cars
- Petrol cars with engine capacity above 1200 cc
- Diesel cars with engine capacity above 1500 cc
4. High-End Motorcycles
- Motorcycles with engine capacity above 350 cc
5. Super-Luxury Marine and Aircraft
- Yachts
- Personal aircraft, including helicopters
6. Other Sin or Luxury Items (broader category)
- Coal, lignite, peat
- Online gambling and gaming services
