Tobacco Product Prices: The Central Government has decided to impose heavy excise duty on beedis, cigarettes, gutkha, pan masala and flavored tobacco from February 1. This increase will be in addition to the 40% and 18% GST applicable on these products.
New Delhi: The central government has decided to impose heavy excise duty on beedis, cigarettes, gutkha, pan masala and flavored tobacco from February 1. This increase will be in addition to the 40% and 18% GST applicable on these products. This announcement is in line with the additional tax announced by the Central Government under the GST reforms last year. This is sure to affect the pockets of 10 crore tobacco users. After this announcement by the government, shares of cigarette manufacturing companies including ITC have fallen by 10% to 17%. Government sources say that this tax is being increased in view of the impact of tobacco consumption on people’s health.
cigarette price
According to the notification of the Union Finance Ministry, excise duty will be decided on the basis of the length of the cigarette. That means the price of each cigarette will increase by at least Rs 2.50 to Rs 8.50.
How much increase on whom?
The price of 65 mm long, unfiltered cigarette will increase by Rs 2.05, the price of filtered cigarette will increase by Rs 2.10, the price of 65-70 mm cigarette will increase from Rs 3.60 to Rs 4 and the price of 70-75 mm cigarette will increase by Rs 5.4. The price of some premium cigarettes can go up to Rs 8.50, but they are rarely used.
reduce the burden on beedi
40% GST has been imposed on cigarettes and zarda, while 18% GST has been imposed on beedis. Along with this, additional excise duty will also be imposed.
gutkha and paan
According to the new change, Gutkha will attract 91% excise duty along with 40% GST, chewing tobacco will attract 82% excise duty and Zarda scented tobacco will attract 82% excise duty. Apart from this, additional health and national security cess will also be imposed on the Zarda companies based on their production capacity. After this increase, the total tax on Gutkha and Pan Masala will be 88%.
revenue sharing
The revenue collected from additional excise tax on tobacco products will be shared with the states as per the recommendation of the Finance Commission. At the same time, the health tax on Pan Masala will be shared with the states for health awareness programs or other health related schemes.