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Full list of items with 40% GST tax: From luxury bikes, cars to aircraft for personal use
4 min read | Updated on September 04, 2025, 14:10 IST
SUMMARY
Admission to casinos, race clubs, IPL/sporting events, race club bookmaker licensing and actionable claims (betting, gambling, lottery, online gaming) will now attract 40% GST with Input Tax Credit (ITC).
High-end goods like motorcycles above 350 cc, personal aircraft, yachts and pistols will now attract a 40% tax.
Indirect taxes in India are finally seeing a significant rejig. New GST rates will come into force from September 22, with a two-slab structure of 5% and 18% and a special 40% tax on sin and luxury goods. This means that the 12% and 28% slabs will be eliminated, and many harmful and high-end, non-essential goods will attract a higher tax.
Countries around the world adopt policies to limit the consumption of harmful goods and tax luxury goods to increase revenue. The highest 40% slab approved by the 56th GST Council is designed mainly for goods and services that aren’t essential (merit), should be regulated and can generate higher revenue for the government that can be used for public welfare.
List of goods attracting 40% tax
Many goods, including tobacco products like pan masala and cigarettes, aerated and sugary beverages, luxury cars, high-end motorcycles, yachts and personal aircraft, will now attract 40% tax.
Here is the full list:
| Description | Tax Before | Tax Now |
|---|---|---|
| Pan Masala | 28% | 40% |
| All goods (including aerated waters), containing added sugar or other sweetening matter or flavoured (in brief) | 28% | 40% |
| Carbonated Beverages of Fruit Drink or Carbonated Beverages with Fruit Juice | 28% | 40% |
| Caffeinated Beverages | 28% | 40% |
| Unmanufactured tobacco/tobacco refuse | 28% | 40% |
| Cigars, cheroots, cigarillos, cigarettes | 28% | 40% |
| Other manufactured tobacco, substitutes, extracts | 28% | 40% |
| Tobacco products for inhalation (without combustion) | 28% | 40% |
| Nicotine substitute inhalation products (without combustion) | 28% | 40% |
| Motor vehicles (hybrid petrol) >1200 cc or length >4000 mm | 28% | 40% |
| Motor vehicles (hybrid diesel) >1500 cc or length >4000 mm | 28% | 40% |
| Motor cycles >350 cc | 28% | 40% |
| Aircraft for personal use | 28% | 40% |
| Yachts and other vessels for pleasure or sports | 28% | 40% |
| Revolvers and pistols | 28% | 40% |
| Leasing/rental of goods (without operator) | 28% with ITC | 40% with ITC |
| Admission to casinos, race clubs, or sporting events (e.g., IPL) | 28% with ITC | 40% with ITC |
| Race club services (licensing of bookmakers) | 28% with ITC | 40% with ITC |
| Specified actionable claims (betting, gambling, lottery, online gaming, etc.) | 28% with ITC | 40% with ITC |
Key highlights
- Petrol cars with engine capacity above 1200 cc and diesel cars with engine capacity above 1500 cc have been categorised as luxury cars and will now attract 40% tax.
- Tobacco and related products remain at the highest slab and attract up to 40% tax.
- High-end goods like motorcycles above 350 cc, personal aircraft, yachts and pistols will now attract a 40% tax.
- Services such as leasing/rental of goods (without operator), admission to casinos, race clubs, IPL/sporting events, race club bookmaker licensing and actionable claims (betting, gambling, lottery, online gaming) will now have 40% GST with ITC.
GST on cigarettes and tobacco products deferred
Importantly, the 40% GST on tobacco products, including cigarettes and pan masala, will be implemented from a later date once loans are repaid.
“For the specified goods namely, cigarettes, chewing tobacco products like zarda, unmanufactured tobacco and beedi, the existing rates of GST and compensation cess will continue to apply and the new rates will be implemented at a later date to be notified, based on discharging of entire loan and interest liabilities on account of compensation cess,” the Ministry of Finance said in a release on September 3.
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