loader2
Login Open ICICI 3-in-1 Account

Open ICICI
3-in-1 Account

Manage your Savings, Demat and Trading Account conveniently at one place

+91

BLOG

India to impose new excise duty on tobacco products.

ICICIdirect Research 05 Dec 2025 DISCLAIMER

Government passed two bills in the Lok Sabha 1) levy excise duty on tobacco and tobacco products, and 2) a new cess on manufacturing of pan masala, which will replace the GST compensation cess on such sin goods.
The Central Excise (Amendment) Bill, 2025, will replace the GST compensation cess, which is currently levied on all tobacco products like cigarette, chewing tobacco, cigars, hookahs, zarda, and scented tobacco.
Government has proposed excise on cigarettes from Rs2,700/1000 sticks to Rs11,000/1000 sticks depending on the size and type of the cigarettes. This will be addition to the GST rate of 40% levied on tobacco and tobacco products.
Overall, we believe the tax rate on cigarettes will be maintained at 50-55%. We will wait for more clarities on once the bill gets passed in the parliament and implemented in the domestic market.

Download ICICI Direct app

Invest, Track, and Manage your Portfolio Anytime, Anywhere

Download ICICI Direct app

Invest, Track, and Manage your Portfolio Anytime, Anywhere