India’s indirect tax system is about to see a big change starting September 22, with the introduction of a new 40% GST slab. This move eliminates the old 12% and 28% tax brackets, leaving just three rates: 5%, 18%, and the new 40%. The highest rate is mainly aimed at luxury and non-essential items like high-end cars, sugary drinks, and tobacco products.

While cigarettes are included in the 40% slab, this doesn’t necessarily mean prices will spike immediately, as other factors also affect pricing. For products like pan masala, gutka, and chewing tobacco, the higher tax rate will come into effect later due to some unresolved technical issues related to pending industry loans.

Here’s a full list of items that will now attract the 40% GST:

1. Tobacco and Pan Masala Products

* Pan masala

* Gutka

* Chewing tobacco

* Unmanufactured tobacco (excluding leaves)

* Cigarettes

* Cigars, cheroots, cigarillos, and similar products

2. Aerated and Sugary Drinks

* Carbonated beverages

* Sugary cold drinks

* Caffeinated carbonated drinks

3. Luxury Cars

* Petrol cars with engine capacity over 1200 cc

* Diesel cars with engine capacity over 1500 cc

4. High-End Motorcycles

* Motorcycles with engines above 350 cc

5. Super-Luxury Boats and Aircraft

* Yachts

* Personal aircraft, including helicopters

6. Other Sin or Luxury Items

* Coal, lignite, peat

* Online gambling and gaming services

This change is aimed at simplifying the tax system while ensuring luxury and non-essential goods carry a higher tax burden.