GST on Cigarettes in India (2026): Updated Tax Structure, Excise Duty & Compliance Guide
- GST on cigarettes in India is applicable at 40% from 1 February 2026 under the revised GST structure for tobacco products.
- The earlier 28% GST plus Compensation Cess structure for cigarettes was replaced with the revised tax framework effective from 1 February 2026.
- Compensation Cess applicable on cigarettes was discontinued as part of the revised tobacco taxation structure.
- Tobacco products may attract additional levies such as Additional Excise Duty based on the applicable product category and government notifications.
- The overall tax burden on cigarettes depends on the product type, applicable GST rate, additional duties, and other statutory levies.
- Input Tax Credit (ITC) availability depends on applicable GST provisions and restrictions.
The cigarette GST rate in India is determined under the applicable GST and tobacco taxation framework. From 1 February 2026, cigarettes attract 40% GST under the revised GST structure.
In addition to GST, cigarettes may also be subject to other applicable statutory levies based on the product category and government notifications. Businesses should consider the applicable GST rate, additional duties, and compliance requirements while determining the overall tax impact.
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Revised GST Rate on Cigarettes (Effective 1st February 2026)
The taxation structure for cigarettes in India was revised with effect from 1 February 2026. The earlier structure of 28% GST along with Compensation Cess was replaced with a revised framework consisting of 40% GST and applicable Additional Excise Duty on cigarettes.
Effective 1 February 2026, the cigarette gst rate is 40% along with Additional Excise Duty applicable based on the cigarette category and applicable government notifications. The earlier Compensation Cess structure was discontinued as part of this revised framework.
Updated GST Rates on Cigarettes
| HSN Code | Description | GST Rate (From Feb 2026) | GST Rate (Before Feb 2026) |
|---|---|---|---|
| 2402 2010 | Cigarettes containing tobacco | 40% + Additional Excise Duty | 28% + Compensation Cess |
| 2402 9010 | Cigarettes of tobacco substitutes | 40% + Additional Excise Duty | 28% + Compensation Cess |
HSN Code
Description
GST Rate (From Feb 2026)
GST Rate (Before Feb 2026)
HSN Code
Description
GST Rate (From Feb 2026)
GST Rate (Before Feb 2026)
Additional Excise Duty on Cigarettes (Per- Stick Structure)
Under amendments to the Central Excise Act, the earlier variable Compensation Cess has been replaced by a fixed per-stick Additional Excise Duty, based on the length and type of cigarette.
Additional Excise Duty Rates
| Type of Cigarette (Length) | Excise Duty (Per 1,000 Sticks) | Approximate Per Stick Levy |
|---|---|---|
| Up to 65 mm (Non-Filter) | ₹2,050 | ~₹2.05 |
| Up to 65 mm (Filter) | ₹2,100 | ~₹2.10 |
| 65 mm to 70 mm (Filter) | ₹3,600 – ₹4,000 | ~₹3.60 – ₹4.00 |
| 70 mm to 75 mm (Filter) | ₹5,400 | ~₹5.40 |
| Exceeding 75 mm / Non-standard | ₹8,500 | ~₹8.50 |
Type of Cigarette (Length)
Excise Duty (Per 1,000 Sticks)
Approximate Per Stick Levy
Type of Cigarette (Length)
Excise Duty (Per 1,000 Sticks)
Approximate Per Stick Levy
Type of Cigarette (Length)
Excise Duty (Per 1,000 Sticks)
Approximate Per Stick Levy
Type of Cigarette (Length)
Excise Duty (Per 1,000 Sticks)
Approximate Per Stick Levy
Type of Cigarette (Length)
Excise Duty (Per 1,000 Sticks)
Approximate Per Stick Levy
Key Regulatory Changes Under GST
1. Revised Tax Structure for Cigarettes
The GST structure applicable to cigarettes has been revised with effect from 1 February 2026. Cigarettes attract 40% GST along with applicable Additional Excise Duty based on the product category and applicable government notifications.
2. Tax Components Applicable on Cigarettes
Cigarette tax in India includes multiple components such as GST, Additional Excise Duty, National Calamity Contingent Duty (NCCD), and other applicable statutory levies.
3. Revision in Bidi Taxation
GST rates applicable to bidis and other tobacco products depend on their classification under the applicable HSN code and relevant GST notifications.
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Compliance Requirements for Cigarette Businesses
Manufacturers, wholesalers, and retailers dealing in cigarettes must:
- Register under GST, where applicable.
- Charge 40% GST on cigarettes as per the applicable GST valuation provisions.
- Pay applicable Additional Excise Duty based on the cigarette category and relevant government notifications.
- File GST returns as required under GST provisions.
- Maintain proper records for compliance and audits.
The revised tax structure requires businesses to track multiple tax components, including GST and applicable duties, while ensuring compliance with applicable regulations.
Input Tax Credit (ITC) Under the New Structure
Under the revised system:
- ITC can be claimed on GST paid on business inputs.
- Compensation Cess is no longer applicable (abolished from 31st January 2026).
- Additional Excise Duty must be paid as applicable and cannot be offset against GST ITC.
Conclusion
The tax on cigarettes in India has shifted from the earlier 28% GST plus Compensation Cess structure to a revised framework with 40% GST along with applicable Additional Excise Duty.
The revised structure requires cigarette manufacturers, wholesalers, and retailers to carefully track GST, applicable duties, and compliance requirements while maintaining proper records as per applicable regulations.
