Govt Revises Tobacco Taxes: Lok Sabha Clears Excise Bill Bringing Major Duty Changes

The Lok Sabha has passed The Central Excise (Amendment) Bill, 2025, revising the duty structure on tobacco products such as cigarettes, cigars and chewing tobacco. The amendment brings back excise duty on tobacco — ranging from ₹2,700 to ₹11,000 per 1,000 cigarette sticks, 60–70% levy on tobacco, and 100% on chewing tobacco — replacing compensation cess under GST. Finance Minister Nirmala Sitharaman clarified that this is “not a new tax” but a return to the previous excise system. The move comes as GST collections dipped in November, and the compensation cess is set to continue till loans are repaid. The bill forms part of the government’s broader indirect tax rationalisation strategy.