No more 18% GST on raw tobacco: What it means
Big update for the tobacco industry: the Union government has dropped the 18% excise duty on unmanufactured (raw) tobacco.
The Government issued a gazette notification on February 1 — the day Finance Minister Nirmala Sitharaman presented the Budget — revoking the duty.
The move should make things easier for farmers and manufacturers, who were worried about rising costs.
Exemption only for unbranded, loose raw tobacco
The exemption only covers loose, unbranded raw tobacco—not cigarettes or branded retail packs.
Cigarette taxes are staying put, with no change in the duty levied on cigarettes based on the stick length.
Farmers' concerns were heard
Before the Budget, farmer groups and officials met with Sitharaman to ask for relief.
They argued that higher taxes would hurt their earnings and might even encourage illegal cigarette sales.
Looks like their concerns were heard!