Cigarette prices surge after excise duty hike, here's how much a pack costs now

While wholesale markets were closed on Sunday, distributors expect fresh cigarette stock with the new MRP to enter the market from Monday.

Cigarette prices have increased by at least ₹22 to ₹25 per pack of 10 sticks following the implementation of additional excise duty from Sunday, February 1.

Distributors said that premium cigarettes, 76 mm in length, will now cost between ₹50 and ₹55 per pack of 10 sticks. (PTI)

Distributors said that premium cigarettes, 76 mm in length, will now cost more, with ₹50 and ₹55 added to its price of per pack of 10 sticks, depending on their particular brand, news agency PTI reported.

Manufacturers have yet to issue declarations for the revised maximum retail price (MRP), but distributors have already begun billing retailers for old stock at new prices, at 40 per cent GST (goods and services tax).

While wholesale markets were closed on Sunday, distributors expect fresh stock with the new MRP to enter the market from Monday.

Distributors reportedly expect cigarette packs with new MRPs to arrive from the manufacturers by the end of this month.

"Some of the companies have already put their stocks on hold. They will start releasing after billing under new tax structures," a stockist was quoted as saying.

According to the All India Consumer Products Distributors Federation (AICPDF), there are around 8,000 to 9,000 stockists of cigarette and tobacco products across the country.

However, distributors are concerned that a hike in prices may trigger smuggling and the spread of counterfeit products.

AICPDF, which reportedly claims to represent more than 4.5 lakh distributors and over 1.3 crore general stores and retail outlets across the nation, warned that a sharp increase in tax on legal sin products may harm the traditional, brick-and-mortar retail system, which is already facing tough competition from online and e-commerce platforms.

"Tobacco products are among the few categories where small shopkeepers are still relevant. If this too is pushed into the hands of illicit networks, what will be left for honest retailers? This is not just about taxation-it is about survival," D Patil, president of AICPDF, was quoted as saying by news agency PTI.

Which cigarette would cost how much?

Distributors said that a packet of Wills Navy Cut (76 mm length), a popular mid-sized cigarette, priced at ₹95 per pack of 10 sticks, will now likely cost around ₹120 per pack.

Meanwhile, larger-sized cigarettes, 84 mm in length, such as Wills Classic, Wills Classic Milds, Gold Flake Lights, etc., priced at ₹170 per pack of 10 sticks, are now expected to have a cost between ₹220 and ₹225 per packet.

Slim cigarettes, such as Classic Connect Cigarette (97 mm in length), priced at ₹300 per pack of 20 sticks, are expected to cost ₹350.

An additional excise duty on cigarettes and tobacco products, and a health cess on pan masala, over and above the highest 40 per cent GST rate, took effect from February 1.

The duties replaced the previous 28 per cent GST, plus the compensation cess, on such "sin goods".

Under the new tax structure, short non-filter cigarettes (up to 65 mm in length) will carry an additional duty of ₹2.05 per stick, while short filter cigarettes of the same length would be charged around ₹2.10 per stick.

Meanwhile, medium-length, 65-70 mm, cigarettes will face an additional duty of around ₹3.6 to ₹4 per stick, and long, premium cigarettes, 70-75 mm in length, about ₹5.4 per stick.

Only unusual or non-standard cigarette designs would attract the highest duty of ₹8.50 per stick. However, the most popular cigarette brands will not fall under this slab.

In December last year, the Parliament approved the implementation of such a cess on pan masala and excise duty on tobacco.