Effective February 1, 2026, the government has significantly increased taxes on cigarettes, tobacco, and pan masala. This major tax revamp includes raising the GST to 40% and adding new excise duties and a Health and National Security Cess.
From February 1, 2026, cigarettes, tobacco products, and pan masala have become noticeably pricier. This comes after the government rolled out a major revamp of taxes on "sin goods." The new system adds extra excise duties and a Health and National Security Cess on top of the existing GST, making these products significantly more expensive for consumers.
Major Changes in Tobacco Tax
GST increase: From 28% to 40% for tobacco products.
Compensation cess scrapped: The previous GST-related cess has been discontinued.
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Additional excise duties: Vary based on cigarette length, type, and design.
New cess for pan masala: A Health and National Security Cess added for manufacturers.
Industry analysts warn that manufacturers will pass the higher costs to consumers, meaning packs previously priced at Rs 18 could now cost Rs 70–72, depending on the variant.
How Cigarette Prices Will Change
Short non-filter (≤65 mm): Rs 2.05 excise per stick
Short filter (≤65 mm): Rs 2.10 per stick
Medium-length: Rs 3.6–4 per stick
Long: Rs 5.4 per stick
Premium/non-standard designs: Up to Rs 8.50 per stick
Social Media Reacts: Memes Galore
As soon as FM Sitharaman wrapped her speech, social media platforms, especially X (formerly Twitter), exploded with memes about the price hike. Users joked about the steep costs, shared humorous alternatives, and compared today's prices with older rates, turning the Budget moment into viral comedy gold.
What This Means for Consumers
While the government expects the hike to discourage tobacco consumption and raise revenue, smokers and pan masala consumers will face a hefty hit to their wallets. Health-conscious citizens may see this as a push to reduce usage, but the immediate impact is already being felt at shops and stalls across the country.
