Cigarette prices jump up by ₹55 per pack after excise duty hike

New Delhi: Cigarette prices have risen sharply from February 1 following the introduction of additional excise duty, with the cost of a pack of 10 sticks increasing by at least ₹22–₹25, distributors said.

Premium cigarettes of 76 mm length are now expected to cost ₹50–₹55 more per pack of 10 sticks, depending on the brand. Although manufacturers have not yet issued revised maximum retail prices (MRPs), distributors have started billing existing stock to retailers with 40 per cent GST.

As wholesale markets were shut on February 1, distributors said fresh stock carrying updated MRPs is likely to be lifted starting February 2, reported PTI.

A pack of Wills Navy Cut (76 mm), which earlier retailed at ₹95 for 10 sticks, is expected to be priced at around ₹120, distributors said. Cigarettes measuring 84 mm in length, such as Gold Flake Lights, Wills Classic and Wills Classic Milds, currently priced at ₹170 per pack of 10 sticks, are expected to cost between ₹220 and ₹225.

Slim cigarettes like Classic Connect (97 mm), priced at ₹300 for a pack of 20 sticks, are expected to see their MRP rise to about ₹350.

Distributors said cigarette packs with revised MRPs are expected to reach the market from manufacturers by the end of the month. “Some of the companies have already put their stocks on hold. They will start releasing after billing under new tax structures,” a stockist said.

According to the All India Consumer Products Distributors Federation (AICPDF), there are around 8,000–9,000 stockists dealing in cigarettes and tobacco products across the country. However, distributors warned that steep price hikes could fuel smuggling and the spread of counterfeit products.

The AICPDF, which claims to represent over 4.5 lakh distributors and more than 1.3 crore kirana and retail outlets nationwide, cautioned that sharp tax increases on legal ‘sin goods’ could hurt traditional brick-and-mortar retailers, who are already under pressure from online and quick-commerce platforms.

“Tobacco products are among the few categories where small shopkeepers are still relevant. If this too is pushed into the hands of illicit networks, what will be left for honest retailers? This is not just about taxation—it is about survival,” AICPDF president D Patil said.

An additional excise duty on cigarettes and other tobacco products, along with a health cess on pan masala, came into effect from February 1, over and above the 40 per cent GST rate. These levies have replaced the earlier structure of 28 per cent GST plus compensation cess, which had been in place since the rollout of GST on July 1, 2017.

Under the revised tax framework, non-filter cigarettes up to 65 mm in length will attract an additional duty of around ₹2.05 per stick, while filter cigarettes of the same size will be charged about ₹2.10 per stick. Medium-length cigarettes (65–70 mm) will face an extra duty of approximately ₹3.6–₹4 per stick, and long premium cigarettes (70–75 mm) about ₹5.4 per stick.

The highest duty of ₹8.50 per stick will apply only to cigarettes with unusual or non-standard designs, with the most popular brands not falling under this category.

The levy of the cess on pan masala and excise duty on tobacco products was approved by Parliament in December. In September 2025, the GST Council decided on the mechanism to impose these levies over and above GST after the compensation cess ended following the repayment of loans taken to offset states’ revenue losses during the Covid-19 period.