Lok Sabha Question No. 260 (STARRED), answered on 2023-08-07
Subject: Cess on Tobacco Products
Ministry: FINANCE
Asked by: Dharambir Singh

## GOVERNMENT OF INDIA MINISTRY OF FINANCE DEPARTMENT OF REVENUE

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## LOK SABHA

## STARRED QUESTION NO. *260

## TO BE ANSWERED ON MONDAY, AUGUST 7, 2023/SRAVANA 16, 1945 (SAKA)

## CESS ON TOBACCO PRODUCTS

## *260.  SHRI DHARAMBIR SINGH:

Will the Minister of Finance be pleased to state:

- (a) whether the increase in cess on tobacco products has been kept in abeyance for more than last five years;
- (b) if so, the details thereof;
- (c) whether the Government plans any GST Council Session to deliberate on rate of rationalization; and
- (d) if so, the details thereof?

## ANSWER

## MINISTER OF FINANCE SHRIMATI NIRMALA SITHARAMAN

- (a) to (d): A statement is placed on the Table of the House.

## STATEMENT REFERRED TO IN REPLY TO THE LOK SABHA STARRED QUESTION NO. 260 RAISED BY SHRI DHARAMBIR SINGH FOR 07 th  AUGUST, 2023, ON CESS ON TOBACCO PRODUCTS:

(a) to (d): The GST Council, in its 42 nd Meeting, held in October 2020, decided to constitute a Group of Ministers (GoM) to discuss and analyze the issues pertaining to the Capacity based taxation on Pan Masala, Reverse Charge Mechanism in mentha oil, special composition scheme on brick kilns, etc. Accordingly, a Group of Ministers (GoM) on Capacity-based Taxation and Special Composition Scheme in Certain Sectors in GST had been constituted on 24.05.2021. The GoM submitted its Final Report to the GST Council in its 49 th Meeting. GST rates and Compensation Cess rates 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  49 th and  50 th Meeting,  the  rate  of  Compensation Cess levied on  specified commodities like pan masala, gutkha, chewing tobacco, etc. with declared retail sale price have been revised. Details are placed in the Annexure. There is no further recommendation from the GST Council in this regard.

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| Heading / Subheading / Tariff item   | Description of Goods                                                                                                   | Applicable rate for commodities with declared retail sale price (per unit)   | Applicable rate for commodities other than with declared retail sale price   |
|--------------------------------------|------------------------------------------------------------------------------------------------------------------------|------------------------------------------------------------------------------|------------------------------------------------------------------------------|
| 2106 90 20                           | Pan Masala                                                                                                             | 0.32R                                                                        | 60%                                                                          |
| 2401                                 | Unmanufactured tobacco (without lime tube) - bearing a brand name                                                      | 0.36R                                                                        | 71%                                                                          |
| 2401                                 | Unmanufactured tobacco (with lime tube) - bearing a brand name                                                         | 0.36R                                                                        | 65%                                                                          |
| 2401 30 00                           | Tobacco refuse, bearing a brand name                                                                                   | 0.32R                                                                        | 61%                                                                          |
| 2403 11 10                           | Hookah or gudaku tobacco bearing a brand name                                                                          | 0.36R                                                                        | 72%                                                                          |
| 2403 11 10                           | Tobacco used for smoking 'hookah' or 'chilam' commonly known as 'hookah' tobacco or 'gudaku', not bearing a brand name | 0.12R                                                                        | 17%                                                                          |
| 2403 11 90                           | Other water pipe smoking tobacco, not bearing a brand name                                                             | 0.08R                                                                        | 11%                                                                          |
| 2403 19 10                           | Smoking mixtures for pipes and cigarettes                                                                              | 0.69R                                                                        | 290%                                                                         |
| 2403 19 90                           | Other smoking tobacco bearing a brand name                                                                             | 0.28R                                                                        | 49%                                                                          |
| 2403 19 90                           | Other smoking tobacco not bearing a brand name                                                                         | 0.08R                                                                        | 11%                                                                          |
| 2403 91 00                           | 'Homogenised' or 'reconstituted' tobacco, bearing a brand name                                                         | 0.36R                                                                        | 72%                                                                          |
| 2403 99 10                           | Chewing tobacco (without lime tube)                                                                                    | 0.56R                                                                        | 160%                                                                         |
| 2403 99 10                           | Chewing tobacco (with lime tube)                                                                                       | 0.56R                                                                        | 142%                                                                         |
| 2403 99 10                           | Filter khaini                                                                                                          | 0.56R                                                                        | 160%                                                                         |
| 2403 99 20                           | Preparations containing chewing tobacco                                                                                | 0.36R                                                                        | 72%                                                                          |
| 2403 99 30                           | Jarda scented tobacco                                                                                                  | 0.56R                                                                        | 160%                                                                         |
| 2403 99 40                           | Snuff                                                                                                                  | 0.36R                                                                        | 72%                                                                          |
| 2403 99 50                           | Preparations containing snuff                                                                                          | 0.36R                                                                        | 72%                                                                          |
| 2403 99 60                           | Tobacco extracts and essence, bearing a brand name                                                                     | 0.36R                                                                        | 72%                                                                          |
| 2403 99 60                           | Tobacco extracts and essence, not bearing a brand name                                                                 | 0.36R                                                                        | 65%                                                                          |
| 2403 99 70                           | Cut tobacco                                                                                                            | 0.14R                                                                        | 20%                                                                          |
| 2403 99 90                           | Pan masala containing tobacco 'Gutkha'                                                                                 | 0.61R                                                                        | 204%                                                                         |
| 2403 99 90                           | All goods, other than pan masala containing tobacco 'gutkha', bearing a brand name                                     | 0.43R                                                                        | 96%                                                                          |
| 2403 99 90                           | All goods, other than pan masala containing tobacco 'gutkha', not bearing a brand name                                 | 0.43R                                                                        | 89%                                                                          |

R means retail sale price

Note: The  words 'declared retail sale price' shall mean the retail sale price of such goods which are required to be declared in compliance with the provisions of the Legal Metrology Act, 2009 (1 of 2010) or the rules made there under or under any other law for the time being in force .

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