Lok Sabha Question No. 5171 (UNSTARRED), answered on 2023-04-03
Subject: Tax on Tobacco Products
Ministry: FINANCE
Asked by: V. Kalanidhi

## GOVERNMENT OF INDIA MINISTRY OF FINANCE DEPARTMENT OF REVENUE

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## LOK SABHA

## UNSTARRED QUESTION NO.5171

## TO BE ANSWERED ON MONDAY, APRIL 3, 2023/CHAITRA 13, 1945 (SAKA)

## TAX ON TOBACCO PRODUCTS

## 5171.    DR. KALANIDHI VEERASWAMY:

## Will the Minister of FINANCE be pleased to state:

- (a)  whether  the  Government  is  considering  to  increase  tax  for  all  the  tobacco  products  and  if  so,  the details thereof; and
- (b) whether the Government will impose an additional tax on beedis to discourage beedi smoking as it is more harmful than cigarette smoking and if so, the details thereof?

## ANSWER

## MINISTER OF STATE IN THE MINISTRY OF FINANCE

## (SHRI PANKAJ CHAUDHARY)

- (a) : The duty of excise on tobacco products are reviewed in the budget taking all relevant aspects into account. Vide section 172 of the Finance Act, 2023, the Seventh Schedule to the Finance Act, 2001, has been amended to increase the rate of National Calamity Contingent Duty (NCCD), a duty of excise, on specified cigarettes by about 16%. The increased rates have been made effective from the 2nd February, 2023, by invoking provisions of the Provisional Collection of Taxes Act, 1931. The details are placed at Annexure-I.  As  regards  the  GST  rates  and  Compensation  Cess  rates,  they  are  prescribed  on  the recommendation of  the  GST  Council,  which  is  a  constitutional  body  comprising  of  representatives  of States/UTs and Centre. On the basis of the recommendation of the GST Council in its 49th Meeting held on  the  18th  February,  2023,  the  rate  of  Compensation  Cess  levied  on  specified  commodities  like  pan masala, gutkha, chewing tobacco, etc. have been revised. The details are placed at Annexure-II.
- (b): No such proposal is under consideration.

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## Annexure-I

| Tariff item   | Description of goods                                                                                                                                                                                          | Unit   | NCCD rate (in Rs. per thousand) prior to 02.02.2023   | NCCD rate (in Rs. per thousand) w.e.f. 02.02.2023   |
|---------------|---------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|--------|-------------------------------------------------------|-----------------------------------------------------|
| (1)           | (2)                                                                                                                                                                                                           | (3)    | (4)                                                   | (5)                                                 |
| 2402 20 10    | Other than filter cigarettes, of length not exceeding 65 millimetres                                                                                                                                          | Tu     | 200                                                   | 230                                                 |
| 2402 20 20    | Other than filter cigarettes, of length exceeding 65 millimetres but not exceeding 70 millimetres                                                                                                             | Tu     | 250                                                   | 290                                                 |
| 2402 20 30    | Filter cigarettes of length (including the length of the filter, the length of filter being 11 millimetres or its actual length, whichever is more) not exceeding 65 millimetres                              | Tu     | 440                                                   | 510                                                 |
| 2402 20 40    | Filter cigarettes of length (including the length of the filter, the length of filter being 11 millimetres or its actual length, whichever is more) exceeding 65 millimetres but not exceeding 70 millimetres | Tu     | 440                                                   | 510                                                 |
| 2402 20 50    | Filter cigarettes of length (including the length of the filter, the length of filter being 11 millimetres or its actual length, whichever is more) exceeding 70 millimetres but not exceeding 75 millimetres | Tu     | 545                                                   | 630                                                 |
| 2402 20 90    | Other                                                                                                                                                                                                         | Tu     | 735                                                   | 850                                                 |
| 2402 90 10    | Cigarettes of tobacco substitutes                                                                                                                                                                             | Tu     | 600                                                   | 690                                                 |

| Heading / Subheading / Tariff item   | Description of Goods                                                                                                   | Specific rate for Compensation Cess* (per unit)   |
|--------------------------------------|------------------------------------------------------------------------------------------------------------------------|---------------------------------------------------|
| 2106 90 20                           | Pan Masala                                                                                                             | 0.32R                                             |
| 2401                                 | Unmanufactured tobacco (without lime tube) - bearing a brand name                                                      | 0.36R                                             |
| 2401                                 | Unmanufactured tobacco (with lime tube) - bearing a brand name                                                         | 0.36R                                             |
| 2401 30 00                           | Tobacco refuse, bearing a brand name                                                                                   | 0.32R                                             |
| 2403 11 10                           | Hookah or gudaku tobacco bearing a brand name                                                                          | 0.36R                                             |
| 2403 11 10                           | Tobacco used for smoking 'hookah' or 'chilam' commonly known as 'hookah' tobacco or 'gudaku', not bearing a brand name | 0.12R                                             |
| 2403 11 90                           | Other water pipe smoking tobacco, not bearing a brand name                                                             | 0.08R                                             |
| 2403 19 10                           | Smoking mixtures for pipes and cigarettes                                                                              | 0.69R                                             |
| 2403 19 90                           | Other smoking tobacco bearing a brand name                                                                             | 0.28R                                             |
| 2403 19 90                           | Other smoking tobacco not bearing a brand name                                                                         | 0.08R                                             |
| 2403 91 00                           | 'Homogenised' or 'reconstituted' tobacco, bearing a brand name                                                         | 0.36R                                             |
| 2403 99 10                           | Chewing tobacco (without lime tube)                                                                                    | 0.56R                                             |
| 2403 99 10                           | Chewing tobacco (with lime tube)                                                                                       | 0.56R                                             |
| 2403 99 10                           | Filter khaini                                                                                                          | 0.56R                                             |
| 2403 99 20                           | Preparations containing chewing tobacco                                                                                | 0.36R                                             |
| 2403 99 30                           | Jarda scented tobacco                                                                                                  | 0.56R                                             |
| 2403 99 40                           | Snuff                                                                                                                  | 0.36R                                             |
| 2403 99 50                           | Preparations containing snuff                                                                                          | 0.36R                                             |
| 2403 99 60                           | Tobacco extracts and essence, bearing a brand name                                                                     | 0.36R                                             |
| 2403 99 60                           | Tobacco extracts and essence, not bearing a brand name                                                                 | 0.36R                                             |
| 2403 99 70                           | Cut tobacco                                                                                                            | 0.14R                                             |
| 2403 99 90                           | Pan masala containing tobacco 'Gutkha'                                                                                 | 0.61R                                             |
| 2403 99 90                           | All goods, other than pan masala containing tobacco 'gutkha', bearing a brand name                                     | 0.43R                                             |
| 2403 99 90                           | All goods, other than pan masala containing tobacco 'gutkha', not bearing a brand name                                 | 0.43R                                             |

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