Cigarettes, Beedis, Pan Masala Prices To Rise From February 1

From February 1, consumers will notice a significant increase in the prices of cigarettes, beedis, and pan masala as new taxes and levies come into effect. The government has announced additional excise duties on tobacco products and a new Health and National Security Cess on pan masala. These measures will be applied over and above the Goods and Services Tax (GST) and are aimed at streamlining previous compensation levies.

New GST Rates And Levies Explained

Under the new notification, pan masala, cigarettes, and tobacco products will attract a GST rate of 40 per cent. In comparison, biris will be taxed at 18 per cent GST. On top of this, pan masala will be subject to a Health and National Security Cess, while tobacco items will carry additional excise duties. These changes are designed to replace the current compensation cess that was previously applied to such sin goods.

Implementation And Legislative Backing

The Finance Ministry has confirmed February 1 as the official date for the implementation of these levies. The changes follow the approval of two bills in Parliament last December, allowing the government to introduce the Health and National Security Cess on pan masala production and new excise duties on tobacco products. Additionally, the Ministry notified rules covering chewing tobacco, jarda scented tobacco, and gutkha packing machines for capacity determination and duty collection.

Impact On Consumers And Industry

Consumers can expect a noticeable price increase for these widely used products, while manufacturers will need to comply with the new excise and cess rules. The shift is expected to simplify tax structures on sin goods and phase out the varying compensation cess rates that were previously in place. Analysts also suggest that the higher levies could influence consumption patterns over time.

Looking Ahead

With the new taxation framework coming into effect next month, it is clear that the government aims to strengthen revenue from sin goods while promoting public health awareness. Consumers and industry stakeholders alike will need to adjust to the revised rates and compliance requirements.