New Delhi, Jan 1: The government on Wednesday notified February 1 as the implementation date for additional excise duty on tobacco products and a new cess on pan masala.
The new levies will be imposed over and above the GST rate, replacing the compensation cess currently levied on these sin goods.
From February 1, pan masala, cigarettes, tobacco, and similar products will attract a 40 per cent GST rate, while bidis will be taxed at 18 per cent Goods and Services Tax, according to a government notification.
In addition to GST, a Health and National Security Cess will be levied on pan masala, while tobacco and related products will attract additional excise duty.
The Finance Ministry on Wednesday also notified the Chewing Tobacco, Jarda Scented Tobacco and Gutkha Packing Machines (Capacity Determination and Collection of Duty) Rules, 2026.
Parliament approved two Bills in December authorizing the levy of the new Health and National Security Cess on pan masala manufacturing and excise duty on tobacco.
The government’s Wednesday notification established February 1 as the effective date for these levies. The existing GST compensation cess, currently imposed at varying rates, will cease to exist from February 1.
