Centre announces increased tax on tobacco and pan masala products from Feb 1

​The central government has announced new tax rules for products like cigarettes, tobacco, and pan masala. These changes will come into effect from February 1, making them costlier.

​According to the new rules, tobacco and pan masala products will attract 40% GST, while bidis will be taxed at 18% GST. Earlier, these products had a different tax system that included a compensation cess, which will now be removed.

​Apart from GST, the government will also charge:

​Extra excise duty on tobacco products

A new Health and National Security Cess on pan masala

The government says this step is taken to discourage the use of harmful products and also to increase revenue.

​Experts believe that companies may pass on the extra tax burden to customers, making cigarettes and pan masala expensive for consumers.

​The government has also introduced new rules to closely monitor how much tobacco and pan masala are produced, to ensure proper tax collection.