From 22nd September 2025, the government has considered to simplify GST from the current 4 rates into just 2 main rates:
- 5% (Merit Rate) for essential goods and services.
- 18% (Standard Rate) for most items.
- 40% (Special De-merit Rate) only for luxury and harmful goods.
So, instead of many slabs, GST has become a simpler 2-rate system with one extra high rate for special cases.
The goods that attract 40% GST are:
| HSN Code | Descriptions | From | To |
| 2106 90 20 | Pan masala | 28% | 40% |
| 2202 10 | All goods (including aerated waters), containing added sugar or other sweetening matter or flavoured | 28% | 40% |
| 2202 91 00, 2202 99 | Other non-alcoholic beverages | 18% | 40% |
| 2202 | Carbonated Beverages of Fruit Drink or Carbonated Beverages with Fruit Juice | 28% | 40% |
| 2202 99 90 | Caffeinated Beverages | 28% | 40% |
| 2401 | Unmanufactured tobacco; tobacco refuse [other than tobacco leaves] | 28% | 40% |
| 2402 | Cigars, cheroots, cigarillos and cigarettes, of tobacco or of tobacco substitutes | 28% | 40% |
| 2403 | Other manufactured tobacco and manufactured tobacco substitutes; "homogenised" or "reconstituted" tobacco; tobacco extracts and essences | 28% | 40% |
| 2404 11 00 | Products containing tobacco or reconstituted tobacco and intended for inhalation without combustion | 28% | 40% |
| 2404 1900 | Products containing tobacco or nicotine substitutes and intended for inhalation without combustion | 28% | 40% |
| 8703 | Motor cars and other motor vehicles principally designed for the transport of persons (other than those of heading 8702), including station wagons and racing cars, other than those mentioned at Sr. Nos. 313, 314, 315, 316, 317 and 319 of above table [wherein 28% to 18% is mentioned] | 28% | 40% |
| 870340, 870360 | Motor vehicles with both spark-ignition internal combustion reciprocating piston engine and electric motor as motors for propulsion, of engine capacity exceeding 1200cc or of length exceeding 4000 mm | 28% | 40% |
| 870350, 870370 | Motor vehicles with both compression-ignition internal combustion piston engine [diesel-or semi diesel] and electric motor as motors for propulsion, of engine capacity exceeding 1500cc or of length exceeding 4000 mm | 28% | 40% |
| 8711 | Motor cycles of engine capacity exceeding 350 cc | 28% | 40% |
| 8802 | Aircraft for personal use | 28% | 40% |
| 8903 | Yacht and other vessels for pleasure or sports | 28% | 40% |
| 9302 | Revolvers and pistols, other than those of heading 9303 or 9304 | 28% | 40% |
| 9614 | Smoking pipes (including pipe bowls) and cigar or cigarette holders, and parts thereof | 28% | 40% |
GST 2.0 brings a 40% tax slab for harmful or luxury items like tobacco, sugary drinks, gambling and luxury cars which makes GST simpler, raises revenue, and supports public health.
CAclubindia
