A small pack of cigarettes will soon burn a hole in your pocket, and the government will impose an additional excise duty on several tobacco products from February 1.
The revised tax structure imposes the steepest increase on longer premium cigarettes. However, most of the popular cigarette brands do not come under this slab, reported news agency PTI.
Cigarette tax structure
From February 1, tobacco products – including pan masala and cigarettes – will attract 40 per cent GST, while biris (rolled tobacco leaves) will be taxed at 18 per cent.
The additional duty on cigarettes will depend on the length of the sticks. It is categorized as follows:
The cost of your favorite cigarette brands
The longer, the more expensive – so he won’t decide on the excise tax on cigarettes. Here’s a list of long, short and medium cigarettes by brand to give an estimate of how much their favorite brand would cost from February 1 when these additional excise taxes come into effect:
Excise duty on pan masala
The finance ministry has also notified the Health and National Security Payment Act, which will impose a cess on the production capacity of pan masala-related businesses from February 1.
The overall tax impact on pan masala after factoring in the 40 per cent GST will remain at the current level of 88 per cent.
Chewing and incense tobacco, yarda and gutkha will be subject to excise duty of 82 per cent and 91 per cent respectively.
In addition, tobacco products – including pan masala and cigarettes – will attract 40 per cent GST, while biris (rolled tobacco leaves) will be taxed at 18 per cent.
In India, cigarette taxes have remained unchanged for the past seven years since the introduction of GST in July 2017. This is contrary to global best practices and public health guidelines, which emphasize raising tariffs every year to ensure that cigarette prices rise faster than incomes, new agency PTI reported.
According to World Bank estimates, the total tax impact on cigarettes in India is about 53 percent of the retail price, which is significantly lower than the benchmark of 75 percent or more recommended by the World Health Organization to achieve significant reductions in tobacco consumption.
(With inputs from Brandalyzer, Business Today, Economic Times)
