This news can be a big shock for cigarette smokers and pan masala eaters. The central government has decided to impose excise duty on cigarettes from February 1, 2026. The government issued an official order in this regard on Wednesday night. Earlier, in December 2025, the government had approved the Central Excise (Amendment) Bill, 2020, paving the way for a stricter tax regime on tobacco products.
Heavy tax on tobacco products
Under the new system, excise duty on cigarettes will be decided on the basis of their length. This duty will range from Rs 2,050 to Rs 8,500 per thousand sticks. This means that the longer the cigarette, the higher the tax. This decision is expected to increase the prices of cigarettes, which will have a direct impact on the pockets of consumers. The aim of the government is not only to increase revenue but also to reduce the consumption of tobacco products and take strict steps regarding public health.
According to the notification, the new tax (levy) imposed on tobacco and pan masala will be in addition to the applicable GST rates. These new provisions will replace the existing GST Compensation Cess, which is currently levied at different rates on ‘sin products’. From February 1, pan masala, cigarettes, tobacco and other related products will attract 40 per cent GST, while beedis will attract 18 per cent GST.
Government issued notification
Apart from this, along with GST, Health and National Security Cess will also be imposed on Pan Masala. Also, according to the notification of the Finance Ministry, additional excise duty will also be collected on tobacco and tobacco related products. These changes are expected to increase the total tax burden on tobacco products, which may lead to an increase in their prices.
