Pan masala, cigarettes, tobacco, beedi to be costlier from THIS date due to…

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).

Written by: Sumaila Zaman Edited by: Sumaila Zaman

Published: January 1, 2026, 12:31 PM IST

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https://www.india.com/business/pan-masala-cigarettes-tobacco-beedi-to-be-costlier-from-this-date-february-1-2026-due-to-additional-excise-duty-to-be-effective-new-levies-will-be-over-and-above-gst-rate-8252435/ Copy

In a significant step, the government has notified February 1 as the date from which additional excise duty on tobacco products and a health cess on pan masala will be levied, as reported by news agency PTI.  It is to be noted that 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 such ‘sin goods’.

What products will become costlier from the announced date?

According to a government notification, from February 1, 2026, 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). Additionally, a Health and National Security Cess will be levied on pan masala, while tobacco and related products will attract additional excise duty, as reported by PTI.

Earlier on Wednesday, the Finance Ministry also notified the Chewing Tobacco, Jarda Scented Tobacco and Gutkha Packing Machines (Capacity Determination and Collection of Duty) Rules, 2026.

When will the new prices of pan masala, cigarettes, tobacco and beedi come into effect?

In December, Parliament approved two Bills that allow the levy of the new Health and National Security Cess on pan masala manufacturing and the excise duty on tobacco.

The government on Wednesday notified February 1 as the implementation date for these levies. The current GST compensation cess, levied at varying rates, will cease to exist effective February 1.

(With PTI Inputs)