New GST for Luxury Items: High-End Goods and Applicable Rates
- GST rates for luxury items have been revised, with specified high-end cars and motorcycles attracting 40% GST without compensation cess.
- GST on luxury goods such as clothing, accessories, perfumes, watches, and other high-value items depends on their specific HSN classification and applicable GST rate.
- Jewellery attracts 3% GST under the applicable GST classification.
- Hotel rooms with a value of supply above ₹7,500 per unit per day attract 18% GST as per applicable GST provisions.
- Businesses selling luxury goods must comply with GST requirements, including registration, correct invoicing, HSN classification, and record maintenance.
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.
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New GST Rate on Luxury Items in India
The revised GST rates applicable from 22 September 2025 are provided below for select luxury items (no compensation cess applicable).
Luxury Items New GST Rate
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 |
| Clothing and accessories | Varies | Applicable GST rate based on HSN classification | 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 |
Luxury Item
HSN Code
New GST Rate
Compensation Cess
Luxury Item
HSN Code
New GST Rate
Compensation Cess
Luxury Item
HSN Code
New GST Rate
Compensation Cess
Luxury Item
HSN Code
New GST Rate
Compensation Cess
Luxury Item
HSN Code
New GST Rate
Compensation Cess
Luxury Item
HSN Code
New GST Rate
Compensation Cess
Luxury Item
HSN Code
New GST Rate
Compensation Cess
Luxury Item
HSN Code
New GST Rate
Compensation Cess
Note: The 40% GST slab replaces the earlier 28% GST plus compensation cess structure for specified luxury and sin goods such as high-end vehicles, motorcycles, yachts, and private aircraft.
What Are Considered Luxury Items Under GST?
Luxury items are goods that go beyond basic necessity and are usually associated with status, style, or enhanced comfort. They include:
- High-end automobiles
- Designer clothing and handbags
- Perfumes and cosmetics
- Premium watches and jewellery
- Yachts and private jets
- Air-conditioned restaurants and hotels
These items are subject to higher GST rates and sometimes additional cess charges.
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Old Luxury Items GST Rate
(Old GST Rates – Applicable Until 21st September)
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 |
Luxury Item
HSN Code
GST Rate
Compensation Cess
Luxury Item
HSN Code
GST Rate
Compensation Cess
Luxury Item
HSN Code
GST Rate
Compensation Cess
Luxury Item
HSN Code
GST Rate
Compensation Cess
Luxury Item
HSN Code
GST Rate
Compensation Cess
Luxury Item
HSN Code
GST Rate
Compensation Cess
Luxury Item
HSN Code
GST Rate
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Luxury Item
HSN Code
GST Rate
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GST on Luxury Items in India: Key Insights
- GST rates on luxury items vary based on the product category and applicable HSN classification.
- Products such as cosmetics and other high-value goods attract GST according to their specific classification and applicable rate.
- Jewellery attracts 3% GST under the applicable GST classification.
Impact on Buyers
- Buyers of specified luxury vehicles are subject to 40% GST without compensation cess from 22 September 2025.
- Retail prices generally include GST, while registered businesses show GST separately on tax invoices.
GST Compliance for Luxury Retailers
- GST registration is mandatory due to high-value transactions
- Issue HSN-coded GST invoices
- Maintain separate accounting for luxury and non-luxury segments
- Claim Input Tax Credit on office decor, ads, and service expenses
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Conclusion
Understanding the gst for luxury items helps buyers estimate final prices and allows businesses to stay compliant with proper classification and billing.
