GST reform: starting Monday, these goods will be subject to the highest tax. View the complete list

September 22 GST changes: Under the new tax structure, which goes into effect on Monday, items falling within these categories will be subject to the newly revised highest tax rate of 40% GST. View the items' list here.After its 56th meeting on September 3, 2025, the GST Council, which is led by the Indian federal government, voted to streamline the indirect tax system in India by redesigning the current goods and service tax (GST) slab structure into a "two-tier" system.Indian customers will benefit from a revamped "two-tier" tax structure that goes into effect on Monday, September 22, 2025. Depending on the type of commodity sold in the country, it will be subject to either the 5% or 18% tax band. In India, GST is now imposed in four slabs: 5%, 12%, 18%, and 28%. However, the government has since modified these slabs.

Many products sold in the Indian economy will see price reductions as a result of the federal government's action; nevertheless, starting Monday, a wide range of products will also be subject to higher consumer taxes.

1. Sin Goods: Generally speaking, sin goods are things that are detrimental to society and health, such as cigarettes and pan masala. Cigarettes, pan masala, beedi, and other tobacco goods including chewing tobacco and gutka, as well as online gaming and gambling, would all be subject to a 40% GST tax starting on Monday, September 22, 2025.

2. Luxury cars: Four-wheelers with an internal combustion engine (ICE) capacity greater than 1,200cc and a length greater than four meters were also placed in a 40% tax level by the GST Council. In the past, the ex-showroom pricing of SUVs and MPVs, which are included in this group, was increased by 28% GST and 22% Cess.

3. Over 350cc two-wheelers: The GST Council raised the tax rate for two-wheelers with engines larger than 350cc from 28% GST and 3% Cess to 40%. Despite the removal of the Cess levy, two-wheelers with engines larger than 350cc will now be subject to a higher tax rate.

4. Soft drinks: The central government raised the GST rate from 28% to 40%, which will result in a price increase for soft drinks and other non-alcoholic beverages like Coca-Cola, Pepsi, Mountain Dew, Fanta, and flavor-infused waters.

5. Items that cost more when you're in the 18% tax bracket: Items that will be subject to GST at the higher 18% slab starting on Monday, September 22, 2025, include dining at restaurants, particularly those with air conditioning and premium outlets; consumer durables like refrigerators, washing machines, and air conditioners; beauty and grooming services at salons and spas; and high-end smartphones and imported devices.