Cigarette Prices Soar Post-Budget 2026: New Excise Duty and Health Cess Implemented

• Union Budget 2026 introduces new excise duty and a "Health and National Security Cess" on tobacco products, replacing the old compensation cess.
• Cigarette prices have increased by ₹25 to ₹55 per pack, effective February 1, 2026, impacting all categories from short to premium long sticks.
• The smallest category (below 65mm) sees a ₹15-₹25 hike, 65mm-70mm category increases by ₹30-₹40, and premium long sticks (above 70mm) by up to ₹55.
• Tobacco stocks like ITC and Godfrey Phillips experienced volatility post-announcement, though companies are expected to pass on costs to consumers.
• The move aims to align with global public health standards, discourage tobacco use, and generate revenue for healthcare and infrastructure, but raises concerns about illegal trade.

Why It Matters: Cigarette prices significantly increased post-Budget 2026 due to new taxes, aiming to curb consumption and boost revenue.