GST on bidis reduced to 18%; pan masala hits 91%
From February 1, 2026, GST on cigarettes, pan masala and gutkha will jump to 40% (up from 28%), while bidis were reduced to 18%.
This move is part of a bigger tax overhaul after the government cleared a hefty loan.
Cigarettes are getting pricier
Cigarettes are getting pricier: non-filter sticks (<=65mm) will be taxed at ₹2.05 each; filter ones at ₹2.10.
Medium and long premium cigarettes see even higher rates—up to ₹8.50 per stick for non-standard sizes.
Pan masala's total tax stays high at 88%
Pan masala's total tax stays high at 88%.
Chewing and jarda scented tobacco will attract an excise duty of 82%, gutkha hits 91%, while hookah and pipe mixes face taxes ranging from 40% up to a steep 325%.
The goal is to curb tobacco use
The goal is to curb tobacco use—India's current cigarette taxes are well below the WHO's recommended level.
The government hopes higher prices will mean less smoking and chewing overall.
Manufacturers now have stricter rules
Pan masala manufacturers now have stricter rules: they'll need to register under the new system, install CCTV on packing lines, and report production details—all aimed at keeping things transparent and above board.