Cess on tobacco products : Cigarette companies are in the focus of the market today. Actually, the tax burden on tobacco, cigarettes and pan masala is going to increase. The government has introduced two bills in the Lok Sabha, after which the tax burden on these companies is going to increase. With more details on this news, CNBC-Awaaz’s Laxman Roy said that under the Amendment Bill, 2025, the Central Excise Amendment Bill will be for tax on cigarettes and cigars. Whereas, from Health Security to National Security, there is cess on Pan Masala Gutkha. Actually, after the abolition of cess in GST, the government is trying to ensure that the tax on sin goods is not reduced.
Laxman Roy said that the FM has introduced 2 bills in the Lok Sabha to impose new tax on cigarettes and pan masala. The first of these is the Central Excise Amendment Bill, 2025 and the second is the Health Security to National Security Bill 2025. The Central Excise Amendment Bill is for tax on cigarettes and cigars. Whereas the Health Security to National Security Bill is for cess on Pan Masala Gutkha.
New tax on cigarettes, pan masala
Excise duty will increase as soon as GST compensation cess on cigarettes and cigars is removed. There will be an increase in excise duty equal to the GST compensation cess. There will be no change in the total tax imposed on cigarettes and cigars. Whereas for Pan Masala, under the Health Security to National Security Bill 2025, cess will be levied on the basis of the capacity of the machine making Pan Masala. Cess may range from Rs 101 lakh to Rs 2547 lakh per machine per month.
How much duty is proposed?
Duty on cigars and cigars will be 25 percent or Rs 5,000 per thousand cigars and cigars, whichever is higher. Duty of Rs 3000 per thousand cigarettes will be imposed on filter cigarettes up to 65 mm long. Duty of Rs 2700 per thousand cigarettes will be imposed on non-filter cigarettes up to 65 mm long. At the same time, a duty of Rs 5200 per thousand cigarettes is proposed on long filter cigarettes up to 65mm-70mm. A duty of Rs 4500 per thousand cigarettes is proposed on non-filter cigarettes up to 65 mm- 70 mm long. A duty of Rs 7000 per thousand cigarettes is proposed on filter cigarettes larger than 70mm but up to 75mm. At the same time, a duty of Rs 11,000 per thousand cigarettes longer than 75 mm is proposed.
Similarly, 40 per cent duty on hookah, 325 per cent on tobacco pipes, 10 per cent on handmade beedis, 100 per cent on edible tobacco and 100 per cent on zarda are also proposed.