India has implemented a new excise duty regime on tobacco products, leading to a sharp increase in cigarette prices nationwide from February 1. The move follows the government’s decision to replace the GST compensation cess with a revised excise structure, aimed at raising revenue and curbing tobacco consumption.
Under the new framework, cigarettes will attract an additional excise duty on top of the existing 40% GST. The duty is linked to factors such as cigarette length, filter type and product category, with longer and premium variants facing the steepest tax hikes. Manufacturers and distributors have already begun passing on the higher tax burden to consumers, resulting in noticeable price increases at retail outlets.
Industry executives said revised prices are already visible in several markets, particularly for premium brands, which have seen the sharpest escalation. While the move is expected to influence consumption patterns, especially in price-sensitive segments, it has also raised concerns within the industry about the potential growth of the illicit cigarette trade.
Reports suggest the revised excise structure has led to significant per-pack price increases across categories, ranging from moderate to steep depending on the segment.
Price impact across categories
Short cigarettes (up to 65 mm): Prices up by around ₹22–₹25 per pack of 10 sticks
Medium-length cigarettes (65–70 mm): Increase of approximately ₹30–₹35 per pack
Long cigarettes (70–75 mm): Hike of about ₹40–₹45 per pack
Premium cigarettes (76 mm and above): Prices higher by ₹50–₹55 per pack
Slim and premium imported variants (packs of 20): Increase of ₹45–₹55, depending on brand and length
Retailers expect manufacturers to update official MRPs over the coming weeks as inventories adjust to the new tax regime. In the meantime, consumers are already feeling the impact as cigarette prices rise sharply across the country.
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