Tobacco, Pan Masala to Cost More from Feb 1 as Govt Notifies New Excise Duty

• New excise duties on tobacco products and pan masala will be effective from February 1, replacing the existing GST compensation cess.
• Cigarettes will now attract a 40% GST rate plus an additional excise duty ranging from Rs 2,050 to Rs 8,500 per 1,000 sticks.
• Biris will be taxed at an 18% GST rate under the revised structure.
• The Central Excise (Amendment) Bill, 2025, approved in December, provides the legal framework for these higher duties.
• Tobacco stocks, including ITC and Godfrey Phillips India, saw significant declines (over 9% and 15% respectively) following the announcement.

Why It Matters: Govt implements new excise duties on tobacco and pan masala from Feb 1, making them costlier.