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In December, the Centre approved a new law – the Central Excise (Amendment) Bill 2025 – that replaces a temporary levy on cigarettes and tobacco products.Wednesday’s statement showed that the excise duty would be imposed on cigarettes in addition to the existing 40% goods and services tax.
Total taxes on cigarettes in India currently make up about 53% of retail prices, well below the World Health Organisation benchmark of 75% aimed at discouraging consumption. This also includes a 28% goods and services tax and an additional value-based levy based on the size of the cigarettes.
The higher duties could have an impact on the sales numbers of cigarette manufacturers like ITC and Godfrey Phillips India.

