Smoking will become more expensive from February 1 as the government has increased taxes on cigarettes and other tobacco products. Experts say cigarette prices may go up by 15% to 40%, especially for filtered and longer cigarettes. Companies estimate higher taxes of 20–30%, though they may increase prices in stages instead of all at once.
The government has removed the old compensation cess and introduced a higher GST rate of 40% along with increased excise duty. Officials said cigarettes have not become costlier compared to people’s income over the years, and higher taxes are needed for public health reasons.
Stock markets reacted sharply, with shares of ITC and Godfrey Phillips falling heavily. Tobacco industry bodies criticised the move, warning that higher prices could boost illegal and smuggled cigarette sales. Along with cigarettes, paan masala will also attract a 40% GST plus a new health-related cess, keeping the overall tax burden the same.
Cigarettes to Get Costlier from February 1, Prices May Rise Up to 40%
