News GST Rates: Starting tomorrow, February 1, new GST rates will be introduced on certain products, resulting in price increases. These revised GST rates will specifically affect tobacco-related items. Although the new GST rates were officially announced on September 22, 2025, the updated rates for harmful tobacco products will take effect from February 1.
According to a report from the news agency PTI, an additional excise duty will be imposed on cigarettes and tobacco products, along with a health cess on pan masala, starting from February 1. This will be applied on top of the existing 40 per cent GST rate, which is the highest rate currently in place. These new tax and excise duties will replace the 28 per cent GST and compensation cess that has been in effect since July 1, 2017.
New GST Rates: Check Affected Products
Moreover, from 1st February, a new MRP-based valuation system will be introduced for tobacco products, including chewing tobacco, filter khaini, zarda-flavour tobacco, pan masala, and gutka. Under this system, GST will be calculated based on the declared retail sale price on the packaging.
Pan masala manufacturers will also be required to register under the Health and National Security Cess Act starting 1st February. They must install operational CCTV systems covering all packaging machines, with the footage stored for at least 24 months.
Manufacturers will also need to provide excise authorities with details about the number and capacity of their machines. If any machine remains idle for a period of at least 15 consecutive days, the manufacturer may claim an exemption from excise duty.
From February 1, the Central Excise Act will be amended to impose excise duties on cigarettes based on their length, ranging from Rs 2.05 to Rs 8.50 per stick.
Additionally, the Health and National Security Cess Act will impose a levy based on the production capacity of pan masala units. After accounting for the 40 per cent GST, the total tax burden on pan masala will remain at the current rate of 88 per cent .