The government on Wednesday notified February 1 as the date from which additional excise duty on tobacco products and a new cess on pan masala will come into effect.
The new levies will be imposed over and above the Goods and Services Tax (GST) and will replace the compensation cess currently levied on these sin goods. From February 1, pan masala, cigarettes, tobacco and similar products will attract a GST rate of 40 per cent, while biris will be taxed at 18 per cent GST, according to the notification.
In addition, a Health and National Security Cess will be levied on pan masala, while tobacco and related products will attract an additional excise duty.
The Finance Ministry also notified the Chewing Tobacco, Jarda Scented Tobacco and Gutkha Packing Machines (Capacity Determination and Collection of Duty) Rules, 2026. Parliament had approved two Bills in December enabling the levy of the new Health and National Security Cess on pan masala manufacturing and excise duty on tobacco.
With February 1 set as the implementation date, the existing GST compensation cess, which is currently levied at varying rates, will cease to apply from that day.
