Tobacco Tax Hike: Cigarettes, Pan Masala Costlier from Feb 1; New 40% GST, Cesses Imposed

• New tax structure for cigarettes, tobacco, and pan masala effective February 1, including a 40% GST hike from 28%.
• Additional excise duty on tobacco products and Health & National Security Cess on pan masala will be levied.
• The existing GST compensation cess will be abolished, but new taxes will significantly increase product prices.
• A capacity-based tax system for packing machines aims to curb tax evasion and stabilize revenue for governments.
• Government's objectives include improving public health, reducing tobacco consumption, and increasing revenue for health schemes.

Why It Matters: Tobacco products get costlier from Feb 1 with new taxes, aiming to boost health and revenue.