- Hindi News
- Business
- Cigarette Prices To Rise From Feb 1: Govt Hikes Excise Duty; ITC And Godfrey Phillips Shares Drop Dainik Bhaskar
New Delhi54 minutes ago
- copy link
Every year around the world, more than 80 lakh people die prematurely due to cigarette smoking. In India, every year more than 10 lakh people die due to smoking.
The Central Government has decided to impose additional excise duty on tobacco products. The new rule will come into effect from February 1, 2026, due to which smoking cigarettes will become expensive for more than 25 crore smokers in the country.
Late night on Wednesday, December 31, the Finance Ministry has notified the new rules (Capacity Determination and Collection of Duty, Rules 2026) related to tobacco, zarda and gutkha packaging machines.
According to the new rules, excise duty ranging from Rs 2,050 to Rs 8,500 will be collected per 1,000 sticks depending on the length of the cigarette. This duty will be additional to the existing tax structure. The government aims to make the tax regime on tobacco products more stringent.
Shares of tobacco manufacturing companies fell
As soon as this news comes, huge selling is being seen in the shares of cigarette manufacturing companies. Shares of ITC, the market leader company that makes brands like ‘Gold Flake’ and ‘Classic’, are trading at the level of Rs 368 from Rs 402, falling by 8.62%.
At the same time, shares of Godfrey Phillips India, a company selling Marlbo cigarettes, have also fallen by 12%. Its effect is also visible in the FMCG index and it is trading down by more than 3%.
Health and National Security Cess on top of 40% GST
Tobacco products (pan masala and cigarettes) already attract 40% GST in India. Now from February 1, the government has made a provision to abolish ‘Compensation Cess’ and replace it with ‘Health and National Security Cess’ and ‘Additional Excise Duty’. Parliament had approved two bills related to this in December 2025 itself.
There will be only 18% tax on beedis
According to the new notification, while 40% GST will be levied on cigarettes and pan masala, the tax rate on beedis has been kept at 18% only. New health and national security cess will be imposed on pan masala manufacturing units. This fee will be charged on the basis of the capacity of the machine, so that tax evasion can be prevented.
New system will replace compensation cess
Till now, compensation cess was imposed to compensate the losses incurred by the states after the implementation of GST. Now the government is rationalizing the GST system, under which this cess has been abolished and additional excise duty and health cess have been introduced. From February 1, 2026, all the old compensation cess will be abolished.
25.3 crore smokers in India
India is second after China in the list of countries that consume the most tobacco in the world. According to the World Health Organization, 25.3 crore people aged 15 years and above smoke in India. Of these, approximately 20 crore are men and 5.3 crore are women.
10 lakh people die every year due to cigarettes in India
According to the World Health Organization (WHO), every year around the world more than 80 lakh people die prematurely due to cigarette smoking. In India, every year more than 10 lakh people die due to smoking. If the figures of deaths due to consumption of other tobacco products are also added to this, then every year in India about 13.5 lakh people die due to consumption of tobacco.
According to University College, London, people’s life expectancy is decreasing rapidly due to cigarette smoking. Smoking one cigarette is reducing 20 minutes of life. Whereas if someone is smoking 10 cigarettes every day for 10 years, it means that 500 days of his life have been reduced.
——————–
Read this news also…
Why 18% GST on beedis, 40% on cigarettes: More than 70 lakh people are employed in the beedi business in the country, earlier 28% was charged on both.
After the announcement of changes in GST from September 3, the prices of tobacco products like cigarettes and gutkha are going to increase, whereas, the price of beedis will come down slightly. GST on beedis was earlier 28% which has been reduced to 18%. GST on tendu leaves used in making beedis has been reduced from 18% to 5%.
Click here to read the full news…
Source link
[ad_3]
