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 to maintain tax incidence after the discontinuation of the compensation cess on these goods.

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/gudaku tobacco (from 25% to 40%).
• Increases excise duty rates for chewing tobacco and snuff (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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