Synopsis: Cigarette prices in India are set to rise from February 1st 2026. The government is reintroducing an excise duty on cigarettes. The new tax, added to existing GST, is to keep tobacco prices high for public health reasons and could lead to noticeable increases in per stick and pack prices for smokers.
The year 2026 is bringing some big changes in the tobacco section in the country. The tax structure for tobacco is undergoing its most significant overhaul since the introduction of GST in 2017.
The major change is taking place from February 1, 2026, cigarette prices are set to climb as the government introduces a new excise duty. Here is everything you need to know about the new Sin Tax regime and how it affects your daily expenses.
Why the Sudden Change?
The new change is stemming from the old cess and its outcome majorly. For several years cigarettes were taxed under 40% GST along with a compensation cess. This cess was a step taken to help the states to transition smoothly into GST.
The government is now moving a step ahead to make sure that tobacco doesn’t become cheaper. Through the Central Excise (Amendment) Act, 2025, the government is bringing back a specific excise duty to maintain high tax levels for public health reasons.
The New Excise Duty (The Length Tax)
The overall excise duty will see a ₹2,050 to ₹8,500 for every 1,000 cigarette sticks.
| Cigarette Category | New Excise Duty (per 1,000 sticks) | Estimated Tax Per Stick |
| Non-Filter (up to 65mm) | ₹2,050 | ₹2.05 |
| Filter (up to 65mm) | ₹2,100 | ₹2.10 |
| Medium (65mm – 70mm) | ₹4,000 | ₹4.00 |
| Long/King Size (70mm – 75mm) | ₹5,400 | ₹5.40 |
| Extra Long (Above 75mm) | ₹8,500 | ₹8.50 |
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Price Hike: How much more will you pay?
While manufacturers like ITC (Classic, Gold Flake) and Godfrey Phillips (Marlboro) haven’t released official new price lists yet, market analysts expect retail prices to rise by 15% to 25% to cover the new taxes.
Example 1:
- If current price is: ₹18 per stick (King Size/75mm)
- The estimated increase: ₹3.50 – ₹5.00
- New estimated price: ₹21.50 – ₹23.00
Example 2:
- If current price is: ₹10 per stick (Small/65mm)
- The estimated Increase: ₹2.00 – ₹2.50
- New estimated price: ₹12.00 – ₹12.50.
Conclusion
The new regime is a clear signal from the Ministry of Finance that tobacco will indeed remain a sin good with heavy entry barriers. The government aims to move closer to WHO recommendations (which suggest a 75% total tax burden) and the immediate effect will be felt at the local stores starting from February.
Written by Kenbi Riba
