The government notified on Wednesday the due date from which the current compensation cess on tobacco and pan masala gets replaced with additional excise duty and a new cess.
From February 1, pan masala, cigarettes, tobacco and similar products will attract a GST rate of 40 per cent, while biris will attract 18 per cent Goods and Services Tax (GST), according to a government notification.
The new levies on tobacco and pan masala will be over and above the GST rate, and will replace the compensation cess which is currently being levied on them. Additionally, a Health and National Security Cess will be levied on pan masala, while tobacco and related products will attract additional excise duty.
Also Read: Parliament Winter session: Bill to levy tobacco cess approved
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.
The Parliament’s Winter Session in December had two Bills approved that allow the levy of the new Health and National Security Cess on pan masala manufacturing and excise duty on tobacco.
The government on Wednesday notified February 1 as the implementation date for these levies. The current GST compensation cess, which is currently levied at varied rates, will cease to exist effective February 1.
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