Stocks of cigarettes, pan masala, and tobacco have been in the spotlight on New Year’s Eve as the government on Wednesday notified that the additional excise duty on these products will start from 1 February. Several companies plunged to historic lows on the first day of the new year.
Godfrey Phillips share reduced by 15.45% to 2335.30 a piece on NSE, ITC, on the other hand, plunged by 9.4% to 365.10on NSE. The stocks of these companies have been under pressure as investors fear an increase in the price of tobacco-related products after the levy is imposed from February. The additional levy will be imposed on top of the GST rates on Tobacco and pan masala, while the earlier cess on them as part of the sin goods Category will be dropped.
The GST rates on these products from 1st February will be 40% and biris will attract 18% GST according to the notification of the government of India. The notification also stated that an additional cess of health and national security will be levied on pan masala, while products related to tobacco will attract an additional excise duty.
The Finance Ministry of Wednesday has notified a new set of rules, the Chewing Tobacco, Jarda scented Tobacco, and Gutkha packing machine rules 2026, for strict implementation of the measures in regards to health safety of the citizens. The levies notified now will come into effect from 1st February, and the GST cess currently applicable on the goods will cease from the same date.
The Finance Minister introduced the bill to replace the cess in December 2025. It included products such as cigarettes, pan masala, Chewing Tobacco, cigars, zarda, scented Tobacco, and hookah.
