The central government is set to impose extensive duties on all tobacco products. The Central Excise (Amendment) Bill 2025 has recently been passed in the Rajya Sabha, bringing amendments to the Central Excise Act of 1944. Through this, the centre is moving towards increasing excise duty and cess on cigarettes, cigars, hookah tobacco and various other types of tobacco.
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How much will duties increase?
According to the old law, duty on every 1000 cigarettes ranged from ₹200 to ₹735. In place of that, according to the new bill, the new duty on the same number of cigarettes could be ₹2700 to ₹11000. The bill also proposes imposing higher rates of duty on manufactured tobacco.
Duty on chewing tobacco may increase from 25 per cent to 100 per cent. Duty on hookah has increased from 25 per cent to 40 per cent. The smoking mixture used in pipes or cigarettes had 60 per cent duty according to the previous law. That may be increased to 325 per cent.
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Impact on prices as a result?
The biggest impact could be on cigarettes. Especially expensive cigarettes (particularly premium cigarettes and large filter cigarettes). Where previously ₹545-735 duty was imposed for every 1000 cigarettes, the duty could now be ₹7000 to ₹11000. Prices will increase for cheap cigarettes, gutka, hookah tobacco, and cigars. Prices of various smoking mixtures will also increase extensively. The government claims that, considering public health, the path of price increases is being taken to deter them from smoking.
According to reports from multiple all-India news media, based on the calculations that have emerged, a cigarette that currently costs ₹18 per piece could reach ₹72 per piece after the new duty is imposed. Naturally, it is believed that prices of all other cigarettes will also increase.
