Cigarette tax: From February 1, cigarette prices to rise -- here’s what each stick will cost
According to the notification, unfiltered cigarettes shorter than 65 mm will attract an excise duty of Rs 2,050 per 1,000 sticks, while filtered cigarettes up to 70–75 mm will be taxed at Rs 5,400 per 1,000 sticks. Longer and premium variants will face even higher levies, with duties going up to Rs 8,500 per 1,000 sticks.
- Jan 1, 2026,
- Updated Jan 1, 2026 6:30 PM IST
Cigarette prices in India are set to rise from February 1, 2026, after the government reintroduced a specific central excise duty on cigarettes over and above the Goods and Services Tax (GST). The move marks a major shift in tobacco taxation, ending nearly a decade of a negligible excise regime and directly linking tax liability to the length and type of cigarette.
Under the new framework, excise duty will be levied per 1,000 sticks, with rates varying based on whether a cigarette is filtered or unfiltered and its length in millimetres. According to the notification, unfiltered cigarettes shorter than 65 mm will attract an excise duty of Rs 2,050 per 1,000 sticks, while filtered cigarettes up to 70–75 mm will be taxed at Rs 5,400 per 1,000 sticks. Longer and premium variants will face even higher levies, with duties going up to Rs 8,500 per 1,000 sticks.
This represents a sharp departure from the post-GST regime introduced in 2017, when Basic Excise Duty (BED) on cigarettes was reduced to a token Rs 5 per 1,000 sticks for most categories and Rs 10 per 1,000 sticks for cigarettes longer than 75 mm. In effect, excise had become fiscally irrelevant, with GST and compensation cess doing most of the heavy lifting.
The reintroduction of a meaningful, size-based excise fundamentally alters cigarette pricing dynamics. On a per-stick basis, short unfiltered cigarettes will now carry an excise burden of roughly Rs 2.05 per stick, while short filtered cigarettes will be taxed at about Rs 2.10 per stick. Mid-length cigarettes (65–70 mm) will attract duties in the range of Rs 3.60–4 per stick, while long and premium cigarettes (70–75 mm and above) could face excise of Rs 5.40 per stick or more.
Category / Length Filter Type Excise Duty per 1,000 sticks Approx. Excise per stick ----------------------------------------------------------------------------------------- POST-GST REGIME (2017–2026) Most cigarette categories All Rs 5 ~Rs 0.005 Above 75 mm All Rs 10 ~Rs 0.01
NEW REGIME (FROM FEB 1, 2026) Below 65 mm Unfiltered Rs 2,050 ~Rs 2.05 Below 65 mm Filtered ~Rs 2,100 ~Rs 2.10 65–70 mm Filtered Rs 3,600 – Rs 4,000 Rs 3.60–4.00 70–75 mm Filtered Rs 5,400 ~Rs 5.40 Above 75 mm / Premium Filtered Up to Rs 8,500 Rs 8.50+
For smokers, this means that the length of the cigarette will now be the single biggest driver of price increases. Shorter, mass-market products are likely to see relatively smaller hikes, while longer, premium cigarettes will bear the brunt of the new tax regime. At the retail counter, the size of the stick—rather than just the brand—will play a decisive role in determining price.
Manufacturers have a narrow window to respond. With the changes kicking in from February 1, companies must quickly recalibrate pricing, packaging, compliance systems and production plans. Industry watchers expect differentiated strategies: companies may absorb part of the tax increase on popular, lower-priced brands to protect volumes, while premium and king-size variants are more likely to see the full tax passed on to consumers.
Brands expected to be most impacted include Gold Flake Premium, Red & White King Size, Classic, Marlboro and Navy Cut, which dominate the longer and filtered cigarette segments. By contrast, short cigarettes, minis and stubby non-filter sticks are likely to see more moderate price adjustments.
The new excise will apply in addition to GST, which remains at 18% or 40%, depending on the product category. While the government has withdrawn the GST compensation cess on tobacco, the combined tax burden on cigarettes in India still works out to about 53% of the retail price—well below the World Health Organization’s recommended 75% benchmark for effective tobacco control.
The Finance Ministry has said the revised structure is aimed at curbing tax evasion, boosting revenue and aligning tobacco taxation with global public-health norms.
Cigarette prices in India are set to rise from February 1, 2026, after the government reintroduced a specific central excise duty on cigarettes over and above the Goods and Services Tax (GST). The move marks a major shift in tobacco taxation, ending nearly a decade of a negligible excise regime and directly linking tax liability to the length and type of cigarette.
Under the new framework, excise duty will be levied per 1,000 sticks, with rates varying based on whether a cigarette is filtered or unfiltered and its length in millimetres. According to the notification, unfiltered cigarettes shorter than 65 mm will attract an excise duty of Rs 2,050 per 1,000 sticks, while filtered cigarettes up to 70–75 mm will be taxed at Rs 5,400 per 1,000 sticks. Longer and premium variants will face even higher levies, with duties going up to Rs 8,500 per 1,000 sticks.
This represents a sharp departure from the post-GST regime introduced in 2017, when Basic Excise Duty (BED) on cigarettes was reduced to a token Rs 5 per 1,000 sticks for most categories and Rs 10 per 1,000 sticks for cigarettes longer than 75 mm. In effect, excise had become fiscally irrelevant, with GST and compensation cess doing most of the heavy lifting.
The reintroduction of a meaningful, size-based excise fundamentally alters cigarette pricing dynamics. On a per-stick basis, short unfiltered cigarettes will now carry an excise burden of roughly Rs 2.05 per stick, while short filtered cigarettes will be taxed at about Rs 2.10 per stick. Mid-length cigarettes (65–70 mm) will attract duties in the range of Rs 3.60–4 per stick, while long and premium cigarettes (70–75 mm and above) could face excise of Rs 5.40 per stick or more.
Category / Length Filter Type Excise Duty per 1,000 sticks Approx. Excise per stick ----------------------------------------------------------------------------------------- POST-GST REGIME (2017–2026) Most cigarette categories All Rs 5 ~Rs 0.005 Above 75 mm All Rs 10 ~Rs 0.01
NEW REGIME (FROM FEB 1, 2026) Below 65 mm Unfiltered Rs 2,050 ~Rs 2.05 Below 65 mm Filtered ~Rs 2,100 ~Rs 2.10 65–70 mm Filtered Rs 3,600 – Rs 4,000 Rs 3.60–4.00 70–75 mm Filtered Rs 5,400 ~Rs 5.40 Above 75 mm / Premium Filtered Up to Rs 8,500 Rs 8.50+
For smokers, this means that the length of the cigarette will now be the single biggest driver of price increases. Shorter, mass-market products are likely to see relatively smaller hikes, while longer, premium cigarettes will bear the brunt of the new tax regime. At the retail counter, the size of the stick—rather than just the brand—will play a decisive role in determining price.
Manufacturers have a narrow window to respond. With the changes kicking in from February 1, companies must quickly recalibrate pricing, packaging, compliance systems and production plans. Industry watchers expect differentiated strategies: companies may absorb part of the tax increase on popular, lower-priced brands to protect volumes, while premium and king-size variants are more likely to see the full tax passed on to consumers.
Brands expected to be most impacted include Gold Flake Premium, Red & White King Size, Classic, Marlboro and Navy Cut, which dominate the longer and filtered cigarette segments. By contrast, short cigarettes, minis and stubby non-filter sticks are likely to see more moderate price adjustments.
The new excise will apply in addition to GST, which remains at 18% or 40%, depending on the product category. While the government has withdrawn the GST compensation cess on tobacco, the combined tax burden on cigarettes in India still works out to about 53% of the retail price—well below the World Health Organization’s recommended 75% benchmark for effective tobacco control.
The Finance Ministry has said the revised structure is aimed at curbing tax evasion, boosting revenue and aligning tobacco taxation with global public-health norms.