🧾 GST Rates on Tobacco Products (from 01-02-2026)
As per Notification No. 19/2025-Central Tax (Rate) dated 31 December 2025 (effective from 1 Feb 2026):
| Product Type | GST Rate w.e.f. 01-02-2026 |
|---|---|
| Cigarettes | 40% |
| Pan masala | 40% |
| Unmanufactured tobacco & tobacco refuse | 40% |
| Other manufactured tobacco & substitutes (excluding biris) | 40% |
| Products containing tobacco or nicotine substitutes for inhalation | 40% |
| Bidis | 18% |
Note : The previous 28 % GST slab on tobacco products has been omitted and replaced with 18 % or 40 % GST depending on the item.
👉 The Additional Excise Duty is imposed on the manufacturers, producers or importers of tobacco and related products, not on consumers directly. This duty replaces the old GST compensation cess on these goods.
It applies to those who:
-
Manufacture cigarettes, tobacco and similar products within India.
-
Import tobacco products into India.
Note : Retailers and consumers do not pay this duty directly — it’s built into the cost by producers/importers and generally reflected in higher prices at the retail level.
2. Who Pays the Health & National Security Cess
👉 The Health & National Security Cess is levied on the manufacturers or producers responsible for producing pan masala and other specified goods. It is a separate levy aimed at funding public health initiatives and national security expenditures.
It applies to:
-
Pan masala manufacturers / producers (including those involved in the making of gutkha or similar items if specified by notification).
-
It may be extended to other notified products as per future government notifications under the Health & National Security Cess Act.
Note : Like excise duty, this cess is not directly paid by consumers but by the entities that produce or assemble these products. It may be reflected in the retail prices paid by end-users.
💡 Summary: Who Is Legally Liable?
| Tax / Levy | Who Pays It? | How Collected? |
|---|---|---|
| Additional Excise Duty | Manufacturers, producers, importers of tobacco products | Paid at the production/import stage; passed on in retail prices |
| Health & National Security Cess | Manufacturers / producers of pan masala and other notified goods | Paid by manufacturing units; indirectly reflected in retail pricing |
