Sin Goods

At its 56th meeting on September 3, 2025, the GST Council announced a major revamp of the indirect tax regime. The new structure will come into effect from September 22, 2025, with two main slabs – 5% and 18% – replacing the multiple rates that existed earlier.

Special 40% Rate for ‘Sin Goods’ and Luxury Items

A distinct 40% tax rate has been reserved for designated “sin goods” and certain luxury products. These include alcohol, tobacco, gambling and betting services, high-fat or high-sugar foods, and other items deemed harmful to society or health.

Rationale Behind Higher Taxation

Officials explained that taxing such goods at higher rates aims to discourage consumption while aligning with public health and social responsibility goals.