Services taxed at 40%
The demerit rate, created by the 56th GST Council with effect from 22 September 2025 to replace the old 28% slab for a short list of supplies. In services it reaches casinos, race clubs, betting, gambling, online money gaming, and admission to specified sporting events.
2 entries of the GST rate schedule for services are taxed at 40%, spread across 1 heading of Chapter 99. 3 service codes normally fall at this rate.
- Schedule entries2
- Headings1
- Service codes3
Not sure your service belongs at this rate?An IncorpX GST advisor will check it, freeWhat the schedule taxes at 40%
Every entry at this rate, grouped by the heading it is written under. The credit condition sits with each entry, because at a concessional rate it usually decides whether the rate is worth taking.
Services by way of admission to casinos, race clubs, any place having casinos or race clubs, and sporting events such as the Indian Premier League. Online money gaming is taxed at the same rate.
Credit available This entry does not apply to a recognised sporting event. The 40% demerit rate replaced the earlier 28% rate with effect from 22 September 2025.Services provided by a race club by way of licensing a bookmaker, or by a licensed totalisator in its premises.
Credit availableRates shown here are as published in GST rates on services, Notification 11/2017-Central Tax (Rate) as amended up to Notification 15/2025-Central Tax (Rate) and are reproduced for reference. The GST Council revises rates through notifications, including the rate rationalisation effective 22.09.2025 that withdrew the 12% and 28% slabs for most services and introduced a 40% rate for a short list of them. Always verify the current rate and the conditions attached to it on the CBIC GST rates page or the CBIC tax information portal before invoicing or filing. Rates exclude any applicable cess. IncorpX provides assistance for GST registration and return filing if you need help.
3 SAC codes normally taxed at 40%
Codes whose usual treatment is this rate. A supply under any of them can still fall under a different entry, so open the code to read the full set.
- Classification: Scheme of Classification of Services, Annexure to Notification 11/2017-Central Tax (Rate), Central Board of Indirect Taxes and Customs (cbic-gst.gov.in).
- Rates: GST rates on services, Notification 11/2017-Central Tax (Rate) as amended up to Notification 15/2025-Central Tax (Rate) (CBIC rate finder).
- Exemptions: Exempt services, Notification 12/2017-Central Tax (Rate) as amended up to Notification 16/2025-Central Tax (Rate).
- Reverse charge: Services taxable under reverse charge, Notification 13/2017-Central Tax (Rate) as amended.
- Current position: GST Council notifications published on the CBIC tax information portal.
This directory reproduces government classifications and rate entries for reference. The official gazette and CBIC notifications remain the authoritative sources. IncorpX provides assistance for registrations and filings that use these codes and does not issue the classification or the rates itself.
Guides and resources
How the rate you land on plays out in your invoices and returns.
40% GST questions
Which services are taxed at 40% under GST?
2 entries of the GST rate schedule for services are taxed at 40%, spread across 1 heading of Chapter 99. 3 service codes normally fall at this rate. A recognised sporting event is carved out of the entry, so it is not taxed at this rate. Everything at 40% sits under heading 9996.
Do I get input tax credit at 40%?
Yes, on the normal conditions of Section 16 of the CGST Act, unless a particular entry says otherwise. The credit condition attached to each entry is shown against it on this page.
How is 40% split between CGST and SGST?
For a supply within one state the rate splits equally: 20% CGST and 20% SGST or UTGST. For a supply between states the whole 40% is charged as IGST instead.
Did this rate change on 22 September 2025?
The 56th GST Council rationalised the slab structure with effect from 22 September 2025. For services it withdrew 12% and 28% in most places, created a 40% demerit rate, moved several concessional entries such as works contracts for government bodies up to 18%, and cut beauty and physical well-being services and effluent and bio-medical waste treatment down to 5%. Always verify the current position on the CBIC portal before invoicing.
Not sure this is the right rate for your services?
Tell us what you actually supply and an IncorpX advisor will help you confirm the SAC code, the rate that applies to it and whether reverse charge is in play, before you invoice or file. Free, with no obligation. IncorpX provides assistance for GST registration and return filing; applications are always filed in your name with the tax authorities.
Nebin Binoy 
