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Impact on cigarette to be neutral under GST regime

No change seen in demand-consumption structure or price once GST is rolled out

Avishek Rakshit  |  Kolkata 

Neither the demand-consumption structure nor the price is likely to change for cigarettes, though it has been put in the highest 28 per cent duty slab in the Goods and Services Tax (GST) regime, with an additional five per cent compensational cess and another of varying degree.   Currently, say sector analysts, the applicable average net value added tax (VAT) is 64 per cent. Under GST, cigarettes will be paying 28 per cent and an additional five per cent. Added to which is another complex structure, depending on the length of a cigarette. At the end of the calculation, “the ...

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Impact on cigarette to be neutral under GST regime

No change seen in demand-consumption structure or price once GST is rolled out

Even though cigarettes have been kept in the highest 28 per cent duty slab in the Goods and Services Tax (GST) regime with additional five per cent compensational cess and another varying degree of cess, the demand-consumption structure or the prevalent price is unlikely to change.Sector analysts opined that currently, under the Value Added Tax (VAT) regime, the applicable average net tax on cigarettes is 64 per cent which will not change significantly as GST will be rolled out.Under the GST tax structure, cigarettes will be paying a 28 per cent GST and an additional five per cent cent. Added to it is another complex tax structure.The filter cigarettes of a length not exceeding 65mm will attract an additional Rs. 1,591 per thousand sticks and the variants more than 75mm will attract Rs. 4,170 per thousand sticks under the GST structure. Under the present tax structure, apart from the VAT, which varies across states, the highest slab for cess is Rs. 4,421 per thousand sticks."The ... Neither the demand-consumption structure nor the price is likely to change for cigarettes, though it has been put in the highest 28 per cent duty slab in the Goods and Services Tax (GST) regime, with an additional five per cent compensational cess and another of varying degree.   Currently, say sector analysts, the applicable average net value added tax (VAT) is 64 per cent. Under GST, cigarettes will be paying 28 per cent and an additional five per cent. Added to which is another complex structure, depending on the length of a cigarette. At the end of the calculation, “the ... image
Business Standard
177 22

Impact on cigarette to be neutral under GST regime

No change seen in demand-consumption structure or price once GST is rolled out

Neither the demand-consumption structure nor the price is likely to change for cigarettes, though it has been put in the highest 28 per cent duty slab in the Goods and Services Tax (GST) regime, with an additional five per cent compensational cess and another of varying degree.   Currently, say sector analysts, the applicable average net value added tax (VAT) is 64 per cent. Under GST, cigarettes will be paying 28 per cent and an additional five per cent. Added to which is another complex structure, depending on the length of a cigarette. At the end of the calculation, “the ...

image
Business Standard
177 22