Smoking Cigarette To Be Costly As Govt Hike Excise Duty; Many Say 'Time To Quit'

New Delhi: Cigarette prices across India are likely to rise further following major tax changes approved by the union government in December this year. Under the Central Excise (Amendment) Act, 2025, a new excise structure has been introduced, imposing duties ranging from Rs 11,000 to Rs 82,700 per 1,000 sticks, replacing the existing GST compensation cess.

Longer and premium cigarette formats will face the steepest levies. With the change, smoking cigarettes may now become costlier. The government’s new law aims to curb cigarette sales in the country, considering their adverse impact on people’s health. Smoking reportedly claims over 1.3 million deaths annually across the world.

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The introduction of a 40% GST under the “sin goods” category further significantly increases the overall tax burden on tobacco products.  Combined, these measures could push total taxation up by 25 to 40%, leading to noticeable price increases, particularly for lower-priced brands.

The decision places India closer to the World Health Organization’s recommended 75% tax benchmark to curb tobacco consumption. With smoking linked to over 1.3 million deaths annually, major manufacturers such as ITC are expected to pass on the higher costs, making cigarettes substantially more expensive in the near term.

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