Cigarettes became expensive from February 1
If you are fond of smoking cigarettes, it can spoil your monthly budget. In fact, now puffing a cigarette is proving to be a very expensive deal. There has been a huge jump in the prices of cigarettes after the government imposed additional excise duty. Now you will have to pay at least Rs 22 to 25 more for a packet of 10 cigarettes. At the same time, if you like premium brand cigarettes, then this increase can go up to Rs 50 to 55 per packet.
After seven years the government made such a big increase
This is the first time in the last seven years that the government has made such a huge increase in the tax on cigarettes. Its main objective is to bring tobacco tax in India at par with Global Public Health Norms.
The new tax structure which was approved by the Parliament in December has now replaced the old system. Earlier, after the implementation of GST from July 2017, the rule of ‘GST Compensation Cess’ was in operation. Now under the new rules, distributors have also started billing the old stock to the retailers with 40 percent GST. Although the new MRP has not been officially published by the companies yet, the market has started setting its prices.
New prices of your favorite cigarettes
- Wills Navy Cut: This cigarette, very popular among the middle class, was earlier available at Rs 95 per packet (10 cigarettes). Now for this you may have to spend around Rs 120.
- Premium Brands (84mm): Larger cigarettes like ‘Gold Flake Lights’, ‘Wills Classic’ and ‘Wills Classic Milds’ have seen the highest price rise. The packet which was earlier priced at Rs 170, is now likely to be available between Rs 220 to Rs 225.
- Classic Connect: The price of a packet of 20 cigarettes of this brand, which falls in the thin cigarette category, is expected to increase from Rs 300 to around Rs 350.
Traders say that by the end of the month, packets with newly printed prices will be made completely available in the market by the companies, which will make the situation more clear.
Danger of increasing illegal market
This huge increase in prices has given sleepless nights to the distributors. They fear that because cigarettes are so expensive, people will look for cheaper alternatives, which will encourage smuggling. All India Cigarette and Tobacco Distributors Federation (AICPDF) has expressed deep concern over this. According to the organization, there are around 8,000 to 9,000 stockists across the country whose business will be affected by this decision.
The federation argues that tobacco products are one of the few categories where small shopkeepers generate a major share of their earnings. If due to high taxes this business goes into the hands of illegal networks and smugglers, then retailers who pay taxes honestly will face a crisis of livelihood.