India imposes excise duty on cigarettes, effective Feb 1
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India's move could increase prices of cigarettes for an estimated 100 million smokers in the world’s most populous country.
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- India imposed excise duty on cigarettes, ranging from 2,050-8,500 rupees per thousand, effective 1 Feb, potentially raising prices for 100 million smokers.
- The Central Excise (Amendment) Bill 2025 replaces a temporary levy, adding to the existing 40% goods and services tax on cigarettes.
- Total taxes on cigarettes in India are about 53% of retail prices, below WHO's 75% benchmark, impacting manufacturers like ITC.
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NEW DELHI - India has imposed an excise duty on cigarettes in a range of 2,050 rupees (S$29) - 8,500 rupees per thousand sticks based on the length of the products, effective Feb 1, the Finance Ministry said in an order late on Dec 31.
The move could increase prices of cigarettes for an estimated 100 million smokers in the world’s most populous country.
In December, the Indian government approved a new law – the Central Excise (Amendment) Bill 2025 – that replaces a temporary levy on cigarettes and tobacco products.
The excise duty would be imposed on cigarettes in addition to a 40 per cent goods and services tax, the Dec 31 order showed.
Total taxes on cigarettes in India currently make up about 53 per cent of retail prices, well below the World Health Organisation benchmark of 75 per cent aimed at discouraging consumption. This includes a 28 per cent goods and services tax and additional value based levy based on the size of the cigarettes.
The higher levies could impact sales of cigarettes manufacturers like ITC and Godfrey Phillips India. REUTERS
