As of September 22, 2025, the highest GST rate in India is 40%, which applies to "sin" and luxury goods. These items include tobacco products (cigarettes, cigars), pan masala, high-end cars/SUVs (>1,200cc/4m length), two-wheelers (>350cc), personal aircraft, and caffeinated beverages.
Key Categories of Goods under 40% GST Slab
Tobacco and related intoxicants as sin goods (e.g., cigarettes, bidis, pan masala, caffeinated drinks) Drinks with high sugar content and caffeinated. Super-luxury and luxury 4-wheelers, 2-wheelers and personal use yacht, aircraft, etc. Casino games and betting activities.
Maximum marginal rate is the highest rate of tax at any income level. This means for those with incomes between Rs 2 crore and Rs 5 crore, 39% will be the highest applicable tax rate, and for those with incomes above Rs 5 crore, it will be 42.74% — the highest tax rate since 1992.
Types of GST in India
CGST (Central Goods and Services Tax) SGST (State Goods and Services. IGST (Integrated Goods and Services Tax) UTGST (Union Territory Goods and Services Tax)
India has approved a 40% GST rate on cigarettes, pan masala, and certain tobacco products as part of a "sin tax" to deter consumption and boost revenue. The 40% GST on these items takes effect from February 1, 2026, replacing the prior 28% GST plus compensation cess structure.
Calculation: Base Price: ₹50,000. GST Amount: ₹50,000 × 18% = ₹9,000. Total Amount: ₹50,000 + ₹9,000 = ₹59,000.
The 40% GST is now a single consolidated rate for sugar-added, flavoured, or carbonated drinks, including cola, lemonade, and fruit-based fizzy beverages. The previous 12% compensation cess has been removed.
The GST/HST break includes certain qualifying goods, such as:
Consumers of 40% gst items- “sin” goods: tobacco, pan masala, sugary drinks, premium beverages etc. will face higher GST. Businesses involved in manufacturing & retail of such goods will have to adjust their margins, possibly reduce consumption.
For any standard-rated supplies of goods or services that you make on or after 1 Jan 2024, you must charge GST at 9%. For instance, if you issue an invoice and receive payments for your supply on or after 1 Jan 2024, you must account for GST at 9%.
How to Claim GST Refund Easily
What is the GST rate for rice? Under GST, rice is categorised under the Harmonised System of Nomenclature (HSN) code 1006. This code encompasses all types of rice, including basmati, non-basmati, paddy, broken rice, and parboiled rice. A GST rate of 5% applies to each of these rice varieties.
Unbranded and unpackaged food items such as cereals, pulses, and fresh vegetables are exempt from GST. In contrast, branded and packaged food products attract a 5% or 12% GST, depending on the item and branding status—impacting the applicable food GST rate.
What is the GST on sweets sold in sweet shops? Sweets GST rate is 5% for loose, unbranded sweets and 18% for branded or packaged ones.
GST is a broad-based tax of 10% on most goods, services and other items sold or consumed in Australia. To work out the cost of an item including GST, multiply the amount exclusive of GST by 1.1. To work out the GST component, divide the GST inclusive cost by 11.
In simple terms, GST tax returns in Canada are the reports organizations submit to the Canada Revenue Agency (CRA) in order to report the amount of Goods and Services Tax (GST) that was collected and paid back. GST in Canada is a 5% federal consumption tax applied to most goods and services.
It is expected to lower the cost of goods and services, boost the economy and make our products and services globally competitive. GST will make India a common national market with uniform tax rates and procedures and removes the economic barriers, thereby paving the way for an integrated economy at the national level.
Taxable Items:
GST on gold purchase in India attracts 3% GST (1.5% CGST + 1.5% SGST) rate on the value of gold. So, if the value of gold being purchased is Rs. 10,000 the total GST payable on the transaction will be Rs. 300.