Overview
- Finance Ministry notifications set a length‑based excise duty of ₹2,050–₹8,500 per 1,000 cigarettes effective February 1, applied over and above a 40% GST.
- Shares of ITC and Godfrey Phillips fell sharply on Thursday, with declines reported up to about 10% and 17% respectively as investors priced in weaker volumes and margins.
- Analysts estimate overall cost increases of roughly 22%–28% for 75–85 mm sticks, with likely retail hikes of ₹2–₹3 per stick for longer cigarettes.
- GST on most tobacco products is now 40% (18% on bidis), the compensation cess is withdrawn, and pan masala will face a new Health and National Security Cess based on manufacturing capacity.
- Enforcement tightens with capacity‑based excise for chewing tobacco and gutkha, mandatory CCTV on packing machines, and MRP‑based valuation, as the government cites public‑health goals while the industry warns of illicit trade risks.