Central Excise (Amendment) Bill 2025: Cigarettes, Beedi & Gutka Duty Hike

Central Excise (Amendment) Bill 2025: Cigarettes duty up to ₹11,000/1,000 sticks, gutka to 100%, beedis unchanged. Full duty hike list, price impact & why tobacco won’t get cheaper after GST cess ends.

Table of Contents

The Central Excise (Amendment) Bill 2025 was passed by both the Lok Sabha and Rajya Sabha in the first week of December 2025. Introduced on December 1, 2025 by Finance Minister Nirmala Sitharaman, it significantly increases excise duties on cigarettes, gutka, chewing tobacco, hookah, cigars and other tobacco products to prevent a sharp drop in overall taxation once the GST compensation cess ends (likely mid-2026).

Here’s everything you need to know about the new duty structure, price impact, and why beedis remain largely untouched.

Why the Duty Hike Now?

When the GST compensation cess expires, total tax on tobacco would fall sharply without action. The government has moved the burden back to permanent central excise duty to:

Keep overall tax incidence stable (~53%)
Protect revenue of over ₹50,000 crore annually
Discourage consumption and move closer to WHO’s recommended 75% taxation level

Major Duty Changes at a Glance

Product	Old Excise Rate (approx.)	New Excise Rate (2025)	Expected Price Impact
Cigarettes (non-filter <65mm)	₹200–545 per 1,000 sticks	₹2,700–4,500 per 1,000 sticks	+20–40% per pack
Cigarettes (filter 70–75mm)	₹545–735 per 1,000 sticks	Up to ₹7,000–11,000 per 1,000 sticks	₹15–40 extra per pack
Beedis (handmade)	Re 1 per 1,000	Re 1 per 1,000 (unchanged)	Negligible
Gutka / Chewing Tobacco	25% ad valorem	100% ad valorem	+15–30% per pouch
Hookah Tobacco	25%	40%	+10–20%
Unmanufactured Tobacco	64%	70%	+5–10% (input cost)
Cigars / Cheroots	12.5% or ₹4,006 per 1,000	25% or ₹5,000 per 1,000 (higher of two)	+10–25%
Smoking Mixtures (pipe/roll-your-own)	60%	325%	50%+
Snuff	25%	70%	Significant

Key Highlights

Cigarettes take the biggest hit — premium and longer filter cigarettes now attract up to ₹11,000 per 1,000 sticks.
Beedis are explicitly protected — duty remains Re 1 per 1,000 for handmade beedis to safeguard millions of workers.
Gutka & chewing tobacco jump from 25% to 100% ad valorem, targeting oral cancer reduction.
Total tax burden (GST + new excise) stays roughly the same immediately, but prevents future affordability surge.

Who Wins, Who Loses?

Winners: Public health (higher prices = lower consumption), government revenue stability, beedi workers
Losers: Cigarette and gutka consumers (especially low-income groups), premium tobacco brands

Final Takeaway

The Central Excise (Amendment) Bill 2025 ensures cigarettes and gutka don’t suddenly become cheaper when the GST cess ends. Prices will either stay the same or rise gradually, beedis remain affordable, and the government keeps its revenue while nudging millions toward quitting.