New GST Slab Introduced: List of Items under Highest GST Rate

A new 40% commodities and Services Tax (GST) slab, the highest in the regime, has been imposed by the government on "sin goods" and some luxury items. The new structure lowered taxes for the majority of items to 5% and 18%, as announced by Union Finance Minister Nirmala Sitharaman as part of the new GST changes.

Check what new products will be coming under this highest GST slab.

What are Sin Goods?

"Sin goods" refers to goods that are deemed detrimental to society or the health of an individual or society as a whole. The list consists of pan masala, gutka, tobacco, and sugary or alcoholic drinks. Higher taxes on certain commodities are frequently imposed by governments around the world in an effort to deter consumption and generate funds for public welfare.

The highest GST rates have been regularly applied to sin items in India; formerly, they were charged at 28% plus an extra Compensation Cess. The cess burden has now been combined into a single 40% GST slab as a result of its phase-out.

Items under Highest GST Slab

The following category of Goods now attracts the highest GST rate in India:

Since the majority of these items were already subject to the 28% slab plus Compensation Cess, the tax burden was essentially close to 40%.

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Why is this GST Slab called “Special Rate”?

The 40% slab is referred to as a "special rate" since it only applies to a limited range of products, primarily luxury goods and some sin goods. The reasoning behind this decision is:

• The tax collected on these commodities would have been lower if the cess had been abolished. The government maintains the same tax incidence by combining it with GST.

• The high rate is intended to deter people from using products that have negative social or health repercussions.

New GST Rate Reduced 

The GST council reduced the structure to 5% and 18% by eliminating the 12% and 28% slabs.

Commonplace goods like air conditioners, televisions, compact cars, toothpaste, soaps, and shampoos will now be subject to reduced taxes. Medical-grade oxygen, everyday necessities, and a number of medications have either been moved to the 5% slab or are excluded.

The new arrangement will take effect on September 22.

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