Cigarettes, Beedis and Pan Masala to Get Costlier from February 1 as Centre Imposes New Taxes
The government has also decided to impose a Health and National Security Cess on pan masala. This new cess will replace the existing compensation cess that was levied earlier.
New Delhi: Tobacco products including cigarettes, beedis and pan masala are set to become more expensive from February 1, following the Centre’s decision to impose higher taxes and new cesses on these items.
The Union government has announced that, in addition to the existing Goods and Services Tax (GST), additional excise duties and fresh cesses will be levied on tobacco-related products. The revised prices will come into effect nationwide from February 1.
As per the new tax structure, pan masala, cigarettes and other tobacco products will attract 40 per cent GST, while beedis will continue to be taxed at 18 per cent GST. In addition to GST, tobacco and related products will be subject to additional excise duty.
The government has also decided to impose a Health and National Security Cess on pan masala. This new cess will replace the existing compensation cess that was levied earlier.
Meanwhile, the Union Ministry of Finance on Wednesday notified new rules for chewing tobacco, zarda-scented tobacco and gutkha packing machines, covering capacity determination and duty collection. With these changes, manufacturers will also face higher taxes on production machinery, aimed at tighter regulation of tobacco manufacturing.
It may be noted that Parliament had approved two separate Bills in December, authorising the government to impose a new Health and National Security Cess on pan masala and levy excise duty on tobacco products.
The move is expected to significantly raise retail prices of cigarettes, beedis and pan masala, impacting both consumers and manufacturers across the country.
