New Delhi, Jan 1 (.): The union government has announced higher taxes on Pan Masala and tobacco products, effective from February 1, attracting a GST of up to 40 per cent, according to a notification issued by the Ministry of Finance on Wednesday.
The revised rates of Goods and Services Tax (GST) on tobacco products are in line with the National Security Cess Act for Health Protection, 2025 Bill, passed during the Winter Session of Parliament.
The Act proposes levying a cess on goods based on the machinery installed for manufacturing or the process undertaken to manufacture them. The revenue generated from this cess will be deposited into the Consolidated Fund of India and will help the government meet expenditures related to national security and public health.
Initially, the cess has been applied to pan masala, though the government may notify the imposition of the cess on other goods as well, if required.
According to another notification, bidis will attract 18 per cent GST from February 1. Pan masala; unmanufactured tobacco and its waste; cigarettes, cheroots, cigarillos and cigars made of tobacco or tobacco substitutes; other manufactured tobacco and tobacco substitutes; tobacco products meant for consumption without combustion; and tobacco and nicotine substitutes meant for consumption without combustion will attract 40 per cent GST.
The notification on the new rates has been issued on the recommendation of the GST Council.
. MBJ KK