Effective from September 22, 2025, a 40% GST rate—the highest in India's revised structure—is applied to "sin" goods and luxury items to curb consumption. Key items include tobacco products (cigarettes, pan masala, gutka), carbonated/caffeinated drinks, high-end cars (>1200cc), motorcycles (>350cc), yachts, personal aircraft, and online gaming.
Key Categories of Goods under 40% GST Slab
The key categories of goods and services included under the special 40% GST slab are, Tobacco and related intoxicants as sin goods (e.g., cigarettes, bidis, pan masala, caffeinated drinks) Drinks with high sugar content and caffeinated.
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. All aerated soft drinks, whether fruit-based or cola-based, now attract 40% GST under the sin goods category.
GST applies to most retail sales to Australian consumers of imported:
How to calculate GST?
The introduction of the 40% GST slab under GST 2.0 marks a significant shift in India's indirect tax regime. It sharpens the fiscal distinction between necessities and luxury/sin goods, ensuring essentials become more affordable while 40% gst items ( “sin / high-end” items)contribute more tax.
GST on entry-level bikes (below 350cc) has been reduced from 28% to 18%, making daily commute two-wheelers much more affordable. High-end motorcycles (350cc and above) now attract 40% GST, increasing the cost of premium and imported bikes.
Starting September 22, 2025, GST in India will be simplified to primarily two rates: 5% and 18%, with a special 40% rate on luxury and sin goods like tobacco and high-end vehicles.
GST is a 10% tax added to most goods and services sold in Australia, but not everything in the food and beverage sector is treated equally. Some items are GST-free, while others are fully taxable, and understanding the difference can have a direct impact on your pricing, bookkeeping, and compliance.
While GST on caffeinated drinks are increased on 40 per cent, GST on coffee is reduced to 5 per cent from the present 18 per cent. The government further clarified that this step ensures uniformity in taxation.
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%.
GST Tax Rate: 12%
GST Council Increases Tax on Carbonated and Non- Alcoholic Beverages The GST Council has approved a significant tax increase on carbonated soft drinks, caffeinated beverages, and other non-alcoholic drinks, raising the GST rate to 40% from previous rates of 28% and 18%.
The GST/HST break includes certain qualifying goods, such as:
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.
Taxable Items:
cooking ingredients, such as flour, sugar and baking mixes that don't contain any taxable ingredients. dry preparations marketed for the purpose of flavouring milk. fats and oils marketed for culinary purposes. unflavoured milk, cream, cheese and eggs.
Common Examples of GST Exempt Transactions:
Financial services – Most banking services, interest payments, and insurance premiums. Residential rent – Rental income from residential properties. Donated goods and services – Items or services that are given away without payment.
3. What is the GST rate on processed or frozen poultry products? Processed poultry meat (classified under HSN Code 0207) attracts 5% or 12% GST depending on the level of processing, packaging type, and whether it is frozen or preserved.
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)
Essential food items and daily-use goods like Indian breads, UHT milk, paneer, namkeens, chocolates, shampoos, soaps, bicycles, and kitchenware are now cheaper under the new GST rates 2025.
Frequently Asked Questions. The GST charged for a scooter in 2025 depends on its engine capacity and fuel type. For petrol or diesel scooters with an engine capacity up to 350cc, the GST rate is 18%. For electric scooters, the GST rate is significantly lower at 5%.
Honda Cars India has revised prices across its lineup after the GST Reforms 2025. 🔹 The entire Honda Amaze range is now priced under ₹10 lakh. 🔹 Honda Elevate starts from ₹10.99 lakh (ex-showroom) 🔹 Honda City sees a price cut of up to ₹57,500.