Cigarettes, Pan Masala to get COSTLY: Lok Sabha passes bills, check tax on tobacco products

The prices of cigarettes, Pan Masala and tobacco products are about to increase. Check details here.

New Tax On Cigarettes, Pan Masala: Two new bills focusing on tobacco products have been tabled in the Parliament recently. Union Finance Minister Nirmala Sitharaman presented the bills during the ongoing Winter Session which aims to revise the taxes on tobacco products and pan masala. Following the introduction of the bills, people who consume these products are wondering how much they have to pay or whether cigarettes and pan masala will become costlier or not. Notably, during the discussion on the bills, there was a long debate in the House and after two days of heated debate, the bills were passed in the Lower House of the Lok Sabha. Check details here.

New Tax On Cigarettes, Pan Masala: What Did The Government Say?

During the winter session, the Lok Sabha had passed the Health Security and National Security Cess Bill. Once this bill becomes law, the government will impose additional taxes on tobacco products. As per the Central Government, the budget generated from this tax will be used for national security. The bills were presented by Nirmala Sitharaman in the Lok Sabha on Friday.

New Tax On Cigarettes, Pan Masala: What Did FM Sitharaman Say?

Finance Minister Sitharaman said, “The Kargil War happened due to lack of preparation. Army generals had reported that due to budget constraints since the early 1990s, the army had only 70-80% of authorized weapons, ammunition, and equipment. We do not want that stage to ever return in India.”

As per the Finance Minister, the bills pave the way for enhancing and boosting the public health infrastructure. The Finance Ministry is focussing on reducing public health risks and the cess generated from the taxes will be utilised on national security fronts.

Finance Minister Nirmala Sitharaman clarified the government’s position on several key issues, stating that today’s world is an era of high-tech warfare and sectors like precision weapons, space assets, and cyber operations are very expensive.

What Bills Did FM Sitharaman Introduce For Tax On Tobacco And Pan Masala?

• Central Excise (Amendment) Bill, 2025
• Health Security se National Security Cess Bill, 2025

New Tax On Cigarettes, Pan Masala: What Duties Imposed By Govt?

• Duty on cigarettes depends on their size and type.
• As per the current law, a cigarette with a length of 65 mm has a duty of Rs 200 on 1,000 sticks.
• As per the new bill, cigarettes, without filters, with a length of over 65 mm will attract a duty of Rs 2,700 per 1,000 sticks
• Cigarettes with smaller than 65 mm but not exceeding 70 mm, the duty will be Rs 4,500 per 1,000 sticks. Current it is Rs 250 per 1,000 sticks.
• The proposed excise on cigars, cheroots is 25 percent or Rs 5,000 per 1,000 sticks, whichever is higher.
• The new bill seeks to impose an excise duty of 60–70 per cent on unmanufactured tobacco.