Smoking to Burn a Bigger Hole in Your Pocket From February 1: How New Cigarette Prices Will Be Fixed
Smoking your favourite cigarette could soon burn a bigger hole in your pocket. Cigarette prices across India are set to rise from February 1, 2026, after the Union government notified a new taxation structure that brings back a separate central excise duty on cigarettes, over and above the Goods and Services Tax (GST).
New Delhi, January 2: Smoking your favourite cigarette could soon burn a bigger hole in your pocket. Cigarette prices across India are set to rise from February 1, 2026, after the Union government notified a new taxation structure that brings back a separate central excise duty on cigarettes, over and above the Goods and Services Tax (GST). This marks the first major overhaul in cigarette taxation since the rollout of GST in 2017.
What Has Changed In Cigarette Taxation
Until now, cigarettes were taxed mainly through GST along with a value-based levy. From February 1, the government will reintroduce a specific excise duty, charged per 1,000 cigarettes. The duty will vary based on whether a cigarette is filtered or non-filtered and its length in millimetres, including the filter. Cigarette Prices to Rise From February 1 in India; Check New Excise Duty Rates as ITC and Godfrey Phillips Stocks Plunge.
The excise duty will range between INR 2,050 and INR 8,500 per 1,000 sticks, meaning longer cigarettes will attract higher tax.
How Much Tax Each Cigarette Will Attract
Short non-filter cigarettes up to 65 mm will attract an excise duty of about INR 2.05 per stick, while short filter cigarettes of the same length will face roughly INR 2.10 per stick. Medium-length cigarettes between 65 mm and 70 mm will be taxed at around INR 3.6 to INR 4 per stick. Longer cigarettes measuring 70 mm to 75 mm will attract about INR 5.4 per stick. Cigarette Price Likely to Be Hiked to INR 72 Under New Excise Bill; Potential Price Rise Leaves Internet Divided.
The highest slab of INR 8,500 per 1,000 sticks applies only to non-standard designs, which most popular brands do not fall under.
Which Cigarettes May Get Costlier
Longer and premium cigarettes are expected to see the sharpest price hikes. This includes king-size and filter variants from brands such as Gold Flake, Red & White, Classic, Marlboro, Navy Cut, and flavoured variants like Ice Burst. Shorter and non-filter cigarettes are likely to see relatively smaller increases.
The new excise duty will apply in addition to GST, which stands at 18% or 40%, depending on the product, even as the GST compensation cess on tobacco has been withdrawn. Despite the hike, total taxes will account for around 53% of the retail price, still below the 75% level recommended by the World Health Organisation to discourage smoking.
Manufacturers now have a short transition window to adjust prices, systems, and packaging before consumers begin to feel the impact at retail counters from February 1, 2026.
(The above story first appeared on LatestLY on Jan 02, 2026 09:50 PM IST. For more news and updates on politics, world, sports, entertainment and lifestyle, log on to our website latestly.com).