AbonnéBusiness

India’s New Landmark Tax Reform To Boost Luxury Sales

By Shilpa Dhamija11 septembre 2025

India is set to see a boom in luxury spending as it overhauls domestic taxes for the first time in 8 years. Taxes on all luxury cars are reduced, while luxury watches dodge an anticipated tax hike.

Mumbai’s financial district — the epicenter of India’s economic policy - stands at the forefront as the country implements its first major GST overhaul in 8 years, aiming to boost consumer spending across sectors (Shutterstock)

10%

India Cuts Taxes on Luxury Cars

2017

Introduction of the GST system in India

18%

Domestic Taxes on Watches

India has overhauled its local VAT system, known as GST (Goods & Services Tax), for the first time in 8 years. Taxes have been slashed on products ranging from daily essentials to luxury items, to fuel consumer spending across all income groups. Luxury cars that were earlier facing a total of 50% tax will now be charged 40%. Taxes on a range of premium home and lifestyle products will be brought down from 28% to 18%. Notably, luxury watches tipped for a tax hike, remain unaffected.

Newsletters

Cet article vous plaît ?

Inscrivez-vous à nos newsletters pour recevoir les dernières publications et analyses selon nos 4 thématiques:

This new tax structure will come into effect as early as 22 September, this year, ahead of India’s biggest festive season - Diwali, celebrated in mid-October, and the winter wedding season.

History of India’s Tax Reforms

Diwali is a festival of lights that celebrates the triumph of light over darkness, celebrated all over India in October (Shutterstock)

The GST system was introduced in India in 2017, in a bid to reform an archaic tax system that had remained largely unchanged since independence (1947). Before GST, India did not have a national tax structure. Every state in India imposed its own tax rules on goods and services, creating a complex and fragmented system that complicated trade and investment in the country. The GST system replaced this patchy state-wise structure with one, uniform national tax structure, making it easier to do business across India.

When the GST system was introduced, goods and services were divided into four tax slabs; 5%, 12%, 18% and 28%. Eight years on, in a bid to simplify it even further, the number of slabs is cut to just two; 5% and 18%. This means that taxes of products that were in the 12% and 28% slabs have been reduced in the latest GST system, to accommodate them into the 5% and 18% tax slabs. The tax reduction will affect a wide-range of goods - such as luxury home and office products like top-end fridges, air-conditioners, luxury furniture to industrial items like auto-parts.

Only a handful of products such as tobacco and aerated drinks that are considered harmful for health, and luxury auto, yachts, private air-crafts that are non-essential items, will be slotted in a special 40% GST category.

How India’s GST 2.0 Reform Will Boost the Luxury Market

Pour continuer à lire cet article, abonnez-vous maintenant

CHF 10.- par mois / CHF 99.- par année

Accès illimité à tous les contenus payants
Des analyses approfondies sur l'industrie du luxe que vous ne trouverez nulle part ailleurs.
Des études et rapports sur les principaux défis à venir ainsi que leur décryptage.
Des articles académiques élaborés par des professeurs et des doctorants membres du Swiss Center for Luxury Research, ainsi qu’un certain nombre d’universités à l’étranger.
Des événements réservés aux membres pour enrichir vos connaissances et votre réseau.

Partager l'article

Continuez votre lecture

Business

Ahmedabad and Pune: India’s Next Luxury Hubs?

Ahmedabad and Pune, two prominent metro cities in western India, have long been home to some of the nation’s ultra-wealthy population. These heritage and culturally rich centers are steadily embracing modern influences and building a global profile. But can they emerge as India’s next major luxury markets?

By Shilpa Dhamija

Travel & Wellness

India: The Quiet Gold Rush for Ultra-Luxury Homes

India’s luxury housing market is touching new highs as prestigious pin-codes command record breaking prices and elite societies redefine luxury housing with 5-star amenities. Luxury Tribune explores how India’s wealthy are turning prime real-estate into a powerful status symbol.

By Shilpa Dhamija

Newsletters

Cet article vous plaît ?

Inscrivez-vous à nos newsletters pour recevoir les dernières publications et analyses selon nos 4 thématiques: