Luxury goods—from designer bags to high-end cars—come with a premium price tag, and so does their tax. Under the Goods and Services Tax system, luxury products attract higher tax rates to balance affordability with indulgence. Let’s explore the gst for luxury items, their classification, and how it impacts buyers and businesses.
The Government of India is updating GST rates effective after 22 Sep 2025. Below are the expected new GST rates for select luxury items (no compensation cess).
Here’s a table of some common luxury goods and their applicable GST rates:
Luxury Item | HSN Code | New GST Rate | Compensation Cess |
---|---|---|---|
High-end cars (above 1500cc) | 8703 | 40% | None |
Luxury motorcycles (above 350cc) | 8711 | 40% | None |
Designer clothes/accessories | Varies | 5% or 18% | None |
Perfumes and deodorants | 3303 | 18% | None |
Premium watches | 9102 | 18% | None |
Jewellery (gold/diamond) | 7113 | 3% | None |
Yachts, private aircraft | 8903, 8802 | 40% | None |
Hotel rooms above ₹7,500/night | 9963 | 18% | None |
Note: The 40% slab replaces the earlier 28%+cess for a narrow set of luxury/sin items (e.g., big cars, >350cc bikes, yachts, private aircraft). Where your Appendix doesn’t explicitly list an item (e.g., “designer apparel”), the slab follows its underlying HSN (generally 5% or 18%); adjust per Appendix if specified.
Luxury items are goods that go beyond basic necessity and are usually associated with status, style, or enhanced comfort. They include:
These items are subject to higher GST rates and sometimes additional cess charges.
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Here’s a table of some common luxury goods and their applicable GST rates:
Luxury Item | HSN Code | GST Rate | Compensation Cess |
---|---|---|---|
High-end cars (above 1500cc) | 8703 | 28% | 15% to 22% |
Luxury motorcycles (above 350cc) | 8711 | 28% | 3% to 15% |
Designer clothes/accessories | Varies | 12%–18% | None |
Perfumes and deodorants | 3303 | 18% | None |
Premium watches | 9102 | 18% | None |
Jewellery (gold/diamond) | 7113 | 3% | None |
Yachts, private aircraft | 8903, 8802 | 28% | 3% to 15% |
Hotel rooms above ₹7,500/night | 9963 | 18% | None |
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Understanding the gst for luxury items helps buyers estimate final prices and allows businesses to stay compliant with proper classification and billing.