GST 2.0 Is Live Now: 40% ‘Sin Tax’ Hits Soft Drinks, Cigarettes | Check Full List Of Items | Business News

Soft drinks, premium cars, and tobacco products set to become expensive.

The first of Sharad Navratri, September 22, will bring mixed effects for consumers. While everyday essentials, cars, motorcycles and household items see price cuts, a separate move by the GST Council is set to push up costs for selected premium and “sin” products.

The Council has introduced a 40% GST slab, aimed at high-end lifestyle items, soft drinks, and tobacco products, marking a major shift in the taxation framework.

Premium Beverages And Vehicles Face Immediate Hike

The new 40% slab applies immediately to a range of drinks and vehicles. Aerated water, carbonated drinks, caffeinated beverages, non-alcoholic flavoured drinks, soft drinks and energy drinks will now carry the highest GST rate.

Luxury vehicles are also affected. Cars with engine capacities above 1,200cc or longer than 4,000 mm, and motorcycles over 350cc, fall under the 40% bracket. Personal-use luxury transport such as yachts, private aircraft, and racing cars are also included, but only for personal or recreational use, not commercial purposes.

Items Included In 40% GST Slab From September 22:

Aerated water

Carbonated drinks

Caffeinated beverages

Non-alcoholic flavoured drinks

Soft drinks

Energy drinks

Cars above 1,200cc or longer than 4,000 mm

Motorcycles over 350cc

Yachts (personal use)

Private aircraft (personal use)

Racing cars (personal use)

Tobacco And Sin Goods To Follow Later

The 40% GST will eventually cover sin goods such as pan masala, gutkha, cigarettes, chewing tobacco, zarda, raw tobacco and bidis. But these items will not see immediate tax changes.

Implementation Timeline Still Uncertain

No fixed date has been set for the 40% GST on tobacco products. The GST Council will decide the rollout only after the government clears pandemic-era compensation obligations.

What Shoppers Should Expect

Consumers of luxury goods and lifestyle items will see prices rise immediately due to the new 40% GST. Buyers of sin goods such as tobacco and pan masala will continue under the current system for now, but a future increase seems inevitable once the compensation cess is phased out.