As Per Price Revised of Excise duty raised on cigarettes & Pan Masala by up to 6%, duty on chewing tobacco doubled as per applied of GST.
Like every year, the taxman has given special attention to tobacco products in this year’s Union budget proposals.
In his budget speech, The Union finance minister Shri Arun Jaitley on Wednesday proposed to hike excise duty on all tobacco products, including bidi etc.. This is the first budget where Jaitley has increased basic excise duty on handmade bidi by 33% and on machine-made by 2.7 times, contrary to three of his previous budgets when the finance minister had left bidi, which is considered small-scale industry, untouched.
The proposed excise duty hike is below the estimates of equity analysts. Analysts had expected the duty increase to be around 10%. Budget has given a positive surprise with mere 6% in excise duty on cigaretes against expectations hovering between 8% and 10%. “This is the lowest hike in past six years,” said Abneesh Roy, analyst with Edelweiss Securities Ltd.
While excise on various lengths of cigarettes has been increased by 2.5% to 6%, for paan masala, it has been increased from 6% to 9% and unmanufactured tobacco from 4.2% to 8.3%. For other tobacco products like chewing tobacco, jarda-scented tobacco and gutkha, Jaitley proposed to double the excise from 6% to 12%. For hand-made bidis, the finance minister proposed to hike basic excise duty from Rs21 per 1,000 to Rs28 per 1,000, and for machine-made bidi Jaitley increased the basic excise duty to Rs78 per 1,000 from Rs21 per 1,000.
Since July 2014, when Jaitley presented the National Democratic Alliance government’s first budget, taxes on cigarettes have increased substantially.

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