New taxes and cess announced on cigarettes, paan masala, and tobacco; to be implemented from February 1st, with different rates for cigarettes and bidis.

Posted on 1st Jan 2026 10:36 am by rohit kumar

The central government made a significant announcement on December 31, 2025, the last day of the year, regarding taxes on cigarettes, pan masala, and other tobacco products. The government announced that an additional excise duty will be levied on tobacco products from February 1, and a new cess will be imposed on pan masala.

 

 

The new taxes on tobacco and pan masala will be in addition to the existing GST rates and will replace the compensation cess currently levied on these harmful products.

 

 

How much tax will be levied on tobacco products now?

According to the government notification, from February 1, pan masala, cigarettes, tobacco, and similar products will attract a 40% GST, while beedis will be subject to an 18% Goods and Services Tax (GST).

 

 

Parliament had passed two bills in December, allowing for the imposition of a new health and national security cess on the manufacture of pan masala and an excise duty on tobacco.

 

 

The government on Wednesday fixed February 1 as the date for implementing these levies. The existing GST compensation cess, which is currently levied at varying rates, will be discontinued from February 1.

 

 

53% tax on tobacco products

The total tax on cigarettes in India currently stands at approximately 53% of the retail price, which is significantly lower than the World Health Organization's benchmark of 75%, aimed at reducing consumption. This includes a 28% Goods and Services Tax and an additional value-based levy depending on the size of the cigarette.

Other news

China is furious after seeing the teaser for Salman Khan's Battle of Galwan; after 'Tiger 3', this new film has also angered our neighbor.

While the Bollywood film 'Dhurandhar' is currently setting the box office on fire, its impact has

IND W vs SL W Highlights: The Indian women's team won the fourth T20 by 30 runs, taking a 4-0 lead against Sri Lanka.

India defeated Sri Lanka by 30 runs in the fourth T20. In the match played in Thiruvananthapuram

Vijay Hazare Trophy: Bengal's 'trio' proved to be a super hit, Jammu and Kashmir bowled out for their lowest score.

The Bengal trio of Mukesh Kumar (4/16), Akash Deep (4/32), and Mohammed Shami (2/14) bowled out J

Aravalli Range: Congress makes serious allegations against the government; Jairam Ramesh says the new definition puts the existence of the Aravalli range at risk.

The Congress party on Monday leveled serious allegations against the central and state government

'Reducing GST on air purifiers will create difficulties,' the Centre's response to the Delhi High Court's concerns and questions.

The central government on Friday opposed a petition in the Delhi High Court seeking a reduction i

New Rules: From credit scores to UPI, these 7 major rules will change from January 1, 2026; how will it affect your wallet?

The year 2025 is now in its final stages. December 31, 2025, is not just a date for changing the

IND vs NZ: Bumrah and Hardik may be rested for the ODI series against New Zealand; is the busy schedule the reason?

India may rest fast bowler Jasprit Bumrah and experienced all-rounder Hardik Pandya for the three

IMD issues red alert; over 70 trains arriving in Delhi are delayed by up to 15 hours due to dense fog; see the complete list.

Dense fog enveloped the national capital, Delhi, on Monday morning. The India Meteorological Depa

China Mediation Claim Row: On China's claim of mediating between India and Pakistan, Congress says PM Modi should break his silence.

The Congress party on Wednesday termed China's claims of mediating between India and Pakistan as

New Year 2026 Greetings: President, PM, Rahul Gandhi, and Akhilesh Yadav extend New Year wishes, emphasizing the importance of protecting the environment.

Across the country, the New Year 2026 is being welcomed with joy and hope. People are greeting ea