Union Finance Minister Nirmala Sitharaman announced an increase in tax on cigarettes and tobacco products in the budget, which has also been implemented across the country from February 1.
Cigarettes are burning your pockets! Find out how much a 200-rupee packet costs now?
Cigarette Pack Price Revised: This news is no less than a major shock for smokers. On one hand, cigarette packets are written in bold letters that smoking is harmful to health, and on the other hand, it is now going to be even more burdensome than before. By increasing taxes on tobacco products and cigarettes in Budget 2026-27, the government has ruined smokers' monthly budgets.
Union Finance Minister Nirmala Sitharaman announced an increase in taxes on cigarettes and tobacco products in the budget, which was implemented nationwide on February 1st. Since then, prices of popular cigarette brands have seen a sharp increase. The most striking example of this recent increase is Stellar Define Paan, whose maximum retail price (MRP) for a pack of 20 cigarettes has risen from ₹200 to ₹380. This represents a massive price jump of nearly 90 percent.
Will cigarettes spoil the budget?
Similarly, a pack of 10 Gold Flake Small cigarettes has now gone up from ₹95 to ₹140, a nearly 47 percent increase. This sharp price increase has surprised ordinary consumers and raised questions about how much more expensive everyday smoking will become.
In fact, this increase in cigarette prices is the result of comprehensive changes to the tax structure for tobacco products in India. The budget revised tax slabs based on cigarette length, filter, and other standards. Additionally, increased cess and compliance costs have further increased the tax burden on companies. Companies have passed these additional costs directly to consumers, making cigarettes across almost all categories more expensive.
What will be the price?
The impact is clearly visible at the retail level. Cigarettes that used to cost around 10 rupees a day are now available for 12 to 13 rupees, representing an increase of 2 to 3 rupees per cigarette. According to analysts at ICICI Securities, revised prices for 75 to 85 mm cigarettes have increased by 22 to 28 percent.
The government claims that the heavy taxes on cigarettes and tobacco products are intended to discourage smoking, especially among first-time smokers and young people. Policymakers are attempting to reduce demand by making cigarettes more expensive. Health experts have long acknowledged that higher taxes are one of the most effective measures to reduce tobacco use.
Until now, cigarettes were taxed under a framework established in 2017, which included a 28 percent GST plus a compensation cess. However, in the recent budget, the government significantly changed this system, implementing a three-tier tax structure on cigarettes. This includes a new excise duty, a Health and National Security Cess, and an increase in the GST rate to 40 percent. This changed tax structure has significantly increased the tax burden on cigarette companies, which is directly impacting consumers in the form of sharp price increases.
