Cigarette, tobacco to become costlier from Feb 1 as govt puts excise duty

PTC News Desk: The government has announced that new taxes on tobacco products and pan masala will come into effect from February 1.

Under the new system, these products will continue to attract GST, but the existing compensation cess will be removed. Instead, pan masala will face a new Health and National Security Cess, while tobacco and related products will be charged additional excise duty.

From February 1, pan masala, cigarettes and other tobacco products will be taxed at 40 per cent GST, while biris will attract 18 per cent GST. The Finance Ministry has also issued new rules to regulate duty collection on chewing tobacco, scented tobacco and gutkha manufacturing machines.

Parliament had approved the new cess and excise duty laws in December. With the notification issued on Wednesday, the current GST compensation cess on these products will be withdrawn from February 1.