Central Excise Bill raises tobacco duty rates, no new expenditure

This Bill amends the Central Excise Act, 1944 to increase the rates of central excise duty on tobacco and tobacco products. The change is intended to provide fiscal space for the government to raise these duties once the compensation cess on these products is discontinued.

Manufacturers, importers, and businesses dealing in tobacco, manufactured tobacco substitutes, and nicotine-containing products (including cigarettes, cigars, hookah tobacco, chewing tobacco, and e-cigarettes/vapes) that are subject to central excise duty.

• Substitutes the table of tariff rates in Section IV of the Fourth Schedule of the Central Excise Act, 1944.
• Increases excise duty rates for unmanufactured tobacco (e.g., from 64% to 70%).
• Increases excise duty rates for cigarettes, cigars, and cigarillos (e.g., filter cigarettes from Rs. 440-545 per thousand to Rs. 3000-7000 per thousand).
• Increases excise duty rates for hookah tobacco (from 25% to 40%) and chewing tobacco (from 25% to 100%).
• Increases excise duty rates for products intended for inhalation without combustion (e.g., from 81% to 100%).
• The Act comes into force on a date appointed by the Central Government via notification in the Official Gazette.

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