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Background: Policy Shift in Indirect Taxation on Tobacco and Cigarettes The Government of India has notified that, effective 1 February 2026, additional excise duty will be imposed on tobacco products, including cigarettes, alongside the ongoing Goods and Services Tax (GST) regime. The notification follows the decision of the 56th GST Council to phase out the GST Compensation Cess framework and restructure taxation on sin goods such as cigarettes, chewing tobacco, gutkha, and pan masala. This restructuring ensures that revenue neutrality is maintained even after the withdrawal of the compensation cess mechanism. Introduction of Additional Excise Duty on Cigarettes and Tobacco Products From 1 February 2026, excise duty will be levied on tobacco products on top of the existing GST rate. The Finance Ministry has notified the Chewing Tobacco, Jarda Scented Tobacco and Gutkha Packing Machines (Capacity Determination and Collection of Duty) Rules, 2026. Under the new excise structure: Additi...

The Union Government is set to introduce a new cess regime targeting sin goods, beginning with pan masala and eventually extending to cigarettes and other tobacco-based products. As Parliament’s Winter Session begins, this marks one of the most significant fiscal policy developments replacing the GST Compensation Cess framework. Introduction of the Health Security se National Security Cess Bill Union Finance Minister Nirmala Sitharaman will introduce the Health Security se National Security Cess Bill, 2025 in the Lok Sabha. The objective of the legislation is two-fold: To mobilize funds for national security expenditure , and To strengthen public health financing . The bill empowers the central government to impose a cess on pan masala and any other items it notifies under public interest. Once passed, the cess will come into effect from the date it is notified in the Official Gazette. Scope of Goods Covered Under the New Cess While the bill is expected to begin with p...

Petition Filed in Supreme Court Seeks Timely Appointment of Judicial and Technical Members for GST Tribunals A Public Interest Litigation (PIL)  has been moved in the Supreme Court  of India, urging the Central Government to expedite the process of appointing judicial and technical members to the Goods and Services Tax (GST) Appellate Tribunal . Filed by Advocate Anoop Prakash Awasthi , the petition seeks to operationalize the tribunal across India, ensuring a functional and streamlined process for GST-related disputes . The petitioner also requests the identification of suitable premises, development of a website, and allocation of budgets to facilitate the smooth functioning of these tribunals. Long-Pending Establishment of the GST Appellate Tribunal The Goods and Services Tax (GST) was implemented in India in 2017 , marking one of the most significant indirect tax reforms in the country’s history. However, one major issue that remains unresolved since the enactment of t...