Tobacco Excise Duty & Pan Masala Cess from Feb 1

New Delhi, Dec 31 (PTI) The government on Wednesday notified February 1 as the date from which additional excise duty will be levied on tobacco products, and a new cess on pan masala.

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.

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.


On top of this, a Health and National Security Cess will be levied on pan masala, while tobacco and related products will attract additional excise duty.

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.

Parliament had in December approved two Bills allowing 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.