Tobacco GST

Parliament passes Central Excise (Amendment) Bill 2025

The Bill was tabled earlier amid the Opposition's protest demanding a discussion on the Special Intensive Revision (SIR) of electoral rolls

Finance Minister Nirmala Sitharaman is expected to introduce two Bills to replace the GST compensation cess on tobacco and pan masala with new levies designed to fund national security

The government is likely to introduce two bills in the Lok Sabha to replace GST compensation cess with another levy, to ensure that the tax incidence remains the same on tobacco, pan masala and other sin goods after discontinuation of the cess. The Central Excise Amendment Bill, 2025, and The Health Security se National Security Cess Bill, 2025, are listed for introduction on Monday by Finance Minister Nirmala Sitharaman. According to sources, the Central Excise Amendment Bill, 2025, will replace GST compensation cess on tobacco by levying excise duty on tobacco. The 'Health Security se National Security Cess Bill, 2025', will replace the compensation cess on pan masala. It seeks to "augment the resources for meeting Security expenditure on national security and for public health, and levy a cess for the said purposes on the machines installed or other processes undertaken by which specified goods are manufactured or produced". Currently, Goods and Services Tax (GST) at 28 per cent

Tobacco products currently fall under the highest GST slab of 28 per cent, along with a compensation cess that varies depending on the product type

New levy could follow full repayment of GST compensation loans, keeping overall tax incidence on tobacco products high

Tobacco stocks like ITC, VST and Sinnar Bidi fell up to 5 per cent today after govt signaled an extra GST cess on cigarettes and bidis, raising margin risks. Analysts suggest stock strategy ahead

This change aims to ensure that tax revenue from tobacco products remains steady after the compensation cess ends on March 31, 2026

Technical charts indicate that shares of ITC, Godfrey Phillips, VST Industries, Delta Corp and United Breweries could slide up to 28% from present levels. Check key levels here

The government has capped the maximum rate of GST compensation cess that would be levied on pan masala, cigarettes and other forms of tobacco and linked the highest rate to their retail sale price. The capping of the cess rate was brought in as part of the amendments to the Finance Bill, 2023, which was passed by the Lok Sabha last Friday. As per the amendment, the maximum GST compensation cess rate for pan masala will be 51 per cent of the retail sale price per unit. In the current regime, the cess is charged at 135 per cent ad valorem. The rate for tobacco has been fixed at Rs 4,170 per thousand sticks plus 290 per cent ad valorem or 100 per cent of the retail sale price per unit. So far, the highest rate was Rs 4,170 per thousand sticks plus 290 per cent ad valorem. The cess is levied over and above the highest Goods and Services Tax (GST) rate of 28 per cent. Changes in schedule-I of GST compensation cess Act, brought in via amendment in Finance Bill, has capped the maximum c

The association has requested to be treated on 'par with other agricultural crops'