Cigarette and Pan Masala Price Hike from Feb 1: New Excise Duty and Cess Explained

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New Delhi: Tobacco users across India may need to spend more from February 1, as the government has announced fresh excise duty and cess on cigarettes, pan masala, and other related products. The move is aimed at increasing revenue and discouraging the consumption of harmful substances.

New Tax Structure Explained

Under the revised tax regime, pan masala, cigarettes, tobacco, and similar products will now attract a GST rate of 40%, while biris will be taxed at 18% GST. Importantly, these new excise duties and cess will be levied over and above the existing GST, making the final retail price significantly higher.

Products Affected by the Price Hike

The new excise duty and cess will apply to:

  • Cigarettes

  • Pan Masala

  • Chewing Tobacco

  • Gutkha and similar tobacco products

  • Biris (at a lower GST rate of 18%)





Retail prices of these items are likely to rise sharply in the coming weeks.

Why Has the Government Taken This Step?

The government has consistently stated that higher taxes on tobacco and pan masala products serve two purposes:

  1. Public health protection by discouraging consumption

  2. Increased revenue collection for welfare and health-related schemes

Health experts have long advocated higher taxation as an effective tool to reduce tobacco usage, especially among the youth.

Conclusion

With the new excise duty and cess coming into effect from February 1, cigarettes, pan masala, and tobacco products are set to become costlier across India. The move signals the government’s continued push toward public health awareness while strengthening tax revenues.

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