Nothing more will be added to 40% GST slab, says FM Nirmala Sitharaman

The GST Council will not add any more goods or services to the 40% Goods and Services Tax (GST) slab, Finance Minister Nirmala Sitharaman said on Wednesday.The minister said the 40% rate will be the highest slab in the revised indirect tax regime. It will apply to sin and luxury goods such as pan masala, tobacco, aerated beverages, personal aircraft and yachts.Sitharaman said the new GST structure, which includes two slabs of 5% and 18%, will take effect for services and most goods from Sept. 22, 2025.However, she clarified that tobacco and pan masala, currently taxed at 28% plus compensation cess, will move to the 40% slab once the government will have repaid the loans taken from the cess fund. The finance minister will decide the transition date for these goods later.The announcement followed the 56th meeting of the GST Council, which approved a major revamp of the indirect tax regime, replacing the earlier four-slab structure with a simplified two-slab system of 5% and 18%.The move marks the rollout of the Centre’s “GST 2.0” reforms, scrapping the 12% and 28% slabs to simplify compliance and spur consumption. The decision also confirms a CNBC-TV18 exclusive on the new GST framework.
Also Read: CNBC-TV18 Newsbreak Confirmed | GST Council clears dual tax rate structure; no GSTC meeting tomorrowFirst Published: Sept 3, 2025 11:06 PM IST

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