Minimum Excise on Cigars
Revised Central Excise
Rates on Tobacco and Tobacco Substitutes Effective 1 February 2026 Notified
Ř Current Notification 03-Central Excise Supersedes Notification 3/2019-Central Excise dated 6 July, 2019
|
The
tobacco tax is so unreal that the market will go underground, other forms of
abuse like narcotics and alcohol will substituted.
It is said that one out of every cigarette sticks
sold in the market is smuggled. The figure will go up. Pan Masala, Gutka and
other tobacco products will also meet the same fate. Chairman
of finance commission will not comment on this for obvious reasons. In any
case, it has presented the report quietly to FM. We do not know what is
recommended as we have to wait till the budget for this. Cess
on Pan Masala is Anti-Constitution – Arun Goyal The
cess on pan masala will not be shared with the states, it is for health,
which is otherwise a state subject. Also the incidence of security purchase
from outside India is extremely high, the budget does not have the money,
hence the cess outside the budget without sharing with states. So
much for the independence of constitutional bodies! What
a contrast to Vijay Kelkar who forced the flow down to municipality and
panchayats levels Besides
this, the hike on cigarette is two to ten rupees per stick or 100 rupees per
pack of ten. and gutka too is more stiff. Exports
of pan masala too will go further underground. |
·
Notification issued:
The Central Government has issued Notification
No. 03/2025–Central Excise, dated 31 December 2025,
revising the effective
central excise duty rates on tobacco and tobacco substitute
products.
·
Supersession:
This notification supersedes
Notification No. 3/2019–Central Excise (6 July 2019), except
for actions already taken under the earlier notification.
·
Effective date:
The revised excise duty structure will come
into force on 1 February 2026.
·
Coverage:
The notification applies to excisable goods falling under Chapter 24 of the Fourth Schedule to the
Central Excise Act, 1944, including:
o Unmanufactured tobacco
o Cigarettes (filter and
non-filter, length-wise slabs)
o Cigars, cigarillos, and
tobacco substitutes
o Smoking mixtures,
chewing tobacco, gutkha, snuff, and extracts
o New-generation tobacco
products under heading 2404
·
Key duty highlights (illustrative):
o Unmanufactured tobacco
(2401): 18%
o Filter cigarettes: ₹2,100–₹5,400
per thousand (length-based slabs)
o Other cigarettes: up to ₹8,500 per thousand
o Smoking mixtures for
pipes/cigarettes: 279%
o Chewing tobacco / jarda: 82%
o Gutkha: 91%
o E-cigarette–related
products / substitutes (2404): 60.5%
·
Nature of exemption:
The notification exempts the specified goods from excise duty in excess of the revised rates,
effectively prescribing the applicable
duty ceilings.
Implication:
The revised excise structure continues India’s policy of high and differentiated taxation on
tobacco products, aligning revenue objectives with public
health considerations, while updating the legal framework post-GST for goods
still subject to central excise.
[Notification No.
03/2025-Central Excise dated 31 December, 2025]
Seeks to supersede notification no.
03/2019-central excise
G.S.R. (E).- In
exercise of the powers conferred by sub-section (1) of section 5A of the
Central Excise Act, 1944 (1 of 1944) (hereinafter referred to as the Excise
Act), and in supersession of the notification of the Government of India in the
Ministry of Finance (Department of Revenue) No. 3/2019-Central Excise, dated
the 6th July, 2019, published in the Gazette of India, Extraordinary, Part II,
Section 3, Sub-section (i), vide number G.S.R.
486(E), dated the 6th July, 2019, except as respect things done or omitted to
be done before such supersession, the Central Government, on being satisfied
that it is necessary in the public interest so to do, hereby exempts the
excisable goods of the description specified in column (3) of the Table below
and falling within the Chapter, heading or sub-heading or tariff item of the
Fourth Schedule to the Excise Act, as specified in the corresponding entry in
column (2) of the said Table, from so much of the duty of excise specified
thereon under the said Schedule to the Excise Act, as is in excess of the
amount calculated at the rate specified in the corresponding entry in column
(4) of the said Table:
Table
|
Sl. No. |
Heading or subheading or
tariff item |
Description of goods |
Rate |
|
(1) |
(2) |
(3) |
(4) |
|
1. |
2401 |
All Goods |
18% |
|
2. |
2402 10 |
All Goods |
21% or Rs. 4170 per thousand |
|
3. |
2402 20 10 |
Other than filter
cigarettes, of length not exceeding 65 millimetres |
Rs. 2050 per thousand |
|
4. |
2402 20 20 |
Other than filter
cigarettes, of length exceeding 65 millimetres but not exceeding 70
millimetres |
Rs. 3600 per thousand |
|
5. |
2402 20 30 |
Filter cigarettes of length
(including the length of the filter, the length of filter being 11
millimetres or its actual length, whichever is more) not exceeding 65
millimetres |
Rs. 2100 per thousand |
|
6. |
2402 20 40 |
Filter cigarettes of length
(including the length of the filter, the length of filter being 11
millimetres or its actual length, whichever is more) exceeding 65 millimetres
but not exceeding 70 millimetres |
Rs. 4000 per thousand |
|
7. |
2402 20 50 |
Filter cigarettes of length
(including the length of the filter, the length of filter being 11
millimetres or its actual length, whichever is more) exceeding 70 millimetres
but not exceeding 75 millimetres |
Rs. 5400 per thousand |
|
8. |
2402 20 90 |
Other |
Rs. 8500 per thousand |
|
9. |
2402 90 10 |
Cigarettes of tobacco
substitutes |
Rs. 4006 per thousand |
|
10. |
2402 90 20 |
Cigarillos of tobacco
substitutes |
12.5% or Rs. 4006 per
thousand, whichever is higher |
|
11. |
2402 90 90 |
Other |
12.5% or Rs. 4006 per
thousand, whichever is higher |
|
12. |
2403 11 10 |
Hukkah or gudaku tobacco |
33% |
|
13. |
2403 11 90 |
Other |
Nil |
|
14. |
2403 19 10 |
Smoking mixtures for pipes
and cigarettes |
279% |
|
15. |
2403 19 90 |
Other |
19% |
|
16. |
2403 91 00 |
“Homogenised” or
“reconstituted” tobacco |
60.5% |
|
17. |
2403 99 10 |
Chewing tobacco |
82% |
|
18. |
2403 99 20 |
Preparations containing
chewing tobacco |
60.5% |
|
19. |
2403 99 30 |
Jarda scented tobacco |
82% |
|
20. |
2403 99 40 |
Snuff |
60.5% |
|
21. |
2403 99 50 |
Preparations containing
snuff |
60.5% |
|
22. |
2403 99 60 |
Tobacco extracts and essence |
57% |
|
23. |
2403 99 70 |
Cut-tobacco |
8% |
|
24. |
2403 99 90 |
Gutkha |
91% |
|
25. |
2403 99 90 |
All goods (Other than
Gutkha) |
81% |
|
26. |
2404 11 10 |
Containing tobacco or
reconstituted tobacco |
60.5% |
|
27. |
24041900 |
Other |
60.5% |
2. This notification shall come into force
on the 1st February, 2026.
[F. No.
CBIC-190349/72/2025-TRU]