New Delhi, Jan 31 || From February 1, the government is bringing a new tax structure for cigarettes, tobacco products and pan masala, aiming to tighten regulation and keep tax levels high on these so-called ‘sin goods’.
An additional excise duty will now be charged on cigarettes and tobacco products, along with a new health and national security cess on pan masala.
These new levies will replace the earlier system under which these products were taxed at 28 per cent GST along with a compensation cess that has been in place since the launch of GST in July 2017.
The government is also introducing a new MRP-based valuation system for several tobacco products such as chewing tobacco, filter khaini, jarda scented tobacco and gutkha.
Under this system, GST will be calculated based on the retail price printed on the packet, instead of factory value.