Budget 2026 may introduce new tax on tobacco, pan masala

Business Nov 10, 2025

Heads up: The government is likely to announce a new National Calamity Contingent Duty (NCCD) or a central cess on tobacco and pan masala in the 2026 Union Budget.
This new charge—either a special duty or central cess—would help keep taxes steady even after the big GST 2.0 update.
Unlike most changes, this one skips GST Council approval and goes straight into the Finance Bill for Parliament to consider.

Why this change is being made

With the old GST Compensation Cess ending soon, this move helps make sure government revenue doesn't take a hit—especially from products like tobacco that already bring in lots of tax money.
It's all about keeping things stable for future budgets and avoiding any sudden jumps or drops in how these products are taxed.