Cigarette production slumped 21.3% in July

The month of July, which saw the roll out of the Goods and Services Tax (GST), witnessed a significant decline of 21.3 per cent, year-on-year, in cigarette production to 5.1 billion. This also translated into a sequential drop of 21 per cent in the output. Under GST, filter and non-filter cigarettes not exceeding 65 mm will attract cess of 5 per cent, plus Rs 1,591 per 1000 sticks. During April-July 2017, total cigarette production decreased by 2.4 per cent to 24 billion sticks.

In this calendar year, cigarette production saw its steepest fall of 42.6 per cent in the month of February. The Union Budget during that month announced excise duty on non-filter cigarettes of length not exceeding 65 mm raised to Rs 311 per thousand from Rs 215.