New Delhi: The finance ministry has removed additional excise duty on tobacco, pan masala and cigarettes with effect from 1 July, following the goods and services tax (GST) implementation.
The revenue department is also to “rescind" the central excise notification dated 27 February 2010, which deals with excise duty rate on unmanufactured tobacco and chewing tobacco. The GST Constitutional (Amendment) Act permits the centre to levy excise duty on six items including tobacco and tobacco products. The other items are petroleum crude, diesel, petrol, natural gas and ATF. Following the roll-out of the GST from 1 July, the central excise notifications for tobacco, pan masala and cigarettes had to be brought in line with the new indirect tax regime.
Under the GST, a cess is levied on demerit and luxury goods over and above the peak GST rate of 28%. The cess on pan masala has been decided at 60%, while in tobacco the levy will vary from 71-204%. Also scented zarda and filter khaini attracts 160% cess, for pan masala containing gutkha it would be 204%. Filter and non-filter cigarettes not exceeding 65mm attract a cess of 5% plus Rs1,591 per 1,000 sticks.
Non-filter cigarettes exceeding 65mm but not exceeding 70mm attract cess of 5% plus Rs2,876, while for filter cigarettes the levy is 5% plus Rs2,126 per thousand sticks. For cigars, a hefty levy of 21% or Rs4,170 per 1,000 sticks, whichever is higher, has been levied. Branded gutkha has been slapped with a cess of 72%, while smoking mixtures for pipes and cigarettes attract a levy of 290%.