Cigarette-gutkha prices incraese
The entire country is watching the Parliament session today . Today is a very important day, especially for tobacco users and people involved in this business. The Central Government is going to introduce two important bills in Parliament today, which are directly related to the tax regime of cigarettes, gutkha and other tobacco products. However, it is reassuring for consumers that despite the introduction of these bills, the prices of these products will not increase at present. The two major bills are, Central Excise (Amendment) Bill, 2025, and Health and National Security Cess Bill, 2025. This bill is to increase the GST on tobacco products like cigarettes, gutkha and pan masala from 28% to 40%.
This bill will introduce a new tax by replacing the old cess. Earlier, 28% GST and a significant cess were levied on cigarettes. Now, these will be subject to 40% GST and a lower cess, but the total tax will remain the same. This means that a pack of cigarettes will remain as expensive as now. Gutkha and pan masala will also be subject to a new cess based on the machine and type of production.
This bill will increase government revenue. Tobacco earns crores of rupees annually, which will now go directly to welfare schemes like “health protection” and “national security”. Earlier, the cess went to the states, but now the central government will benefit from it. Overall, the central government’s exchequer will benefit without increasing prices.
So consumers will not have to pay more immediately. A packet of cigarettes worth Rs 100 was earlier Rs 128 (28% tax), and will remain the same now as the overall tax has been balanced. However, companies will have to face increased costs in complying with the new rules, which could ultimately make their products a little more expensive. For now, there will be no significant impact on the pockets of those who smoke gutkha and cigarettes daily.
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