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Shares of cigarette and tobacco product makers tumbled on Thursday (January 1, 2026) morning trade after the government notified February 1 as the date from which additional excise duty on tobacco products, and a health cess on pan masala will be levied.
The stock of Godfrey Phillips India tanked 10%, while ITC tumbled 6.11% on the BSE.
The new levies on tobacco and pan masala will be over and above the GST rate, and will replace the compensation cess, which is currently being levied on such ‘sin goods’.
From February 1, pan masala, cigarettes, tobacco and similar products will attract a GST rate of 40%, while ‘beedi’ will attract 18% Goods and Services Tax (GST), according to a government notification.
On top of this, a Health and National Security Cess will be levied on pan masala, while tobacco and related products will attract additional excise duty.
The Finance Ministry on Wednesday (December 31, 2025) also notified the Chewing Tobacco, Jarda Scented Tobacco and Gutkha Packing Machines (Capacity Determination and Collection of Duty) Rules, 2026.
Published – January 01, 2026 12:46 pm IST
