• Notification Date: 28-03-2023
• Notification No: N/A

Govt imposes Maximum GST Cess Rate on Tobacco Products

The cess rate for tobacco has been fixed at Rs 4,170 per thousand sticks plus 290 per cent ad valorem or 100 per cent of the retail sale price per unit. So far, the highest rate was Rs 4,170 per thousand sticks plus 290 per cent ad valorem. The cess is levied over and above the highest GST rate of 28 per cent. 

The government has brought in amendments in the Finance Bill to cap the maximum rate of GST compensation cess on pan masala, cigarettes and other forms of tobacco and linked the highest rate to their retail sale price. 

As per the Finance Bill amendments, which were passed in Lok Sabha on Friday, the maximum GST compensation cess rate for pan masala will be 51 per cent of the retail sale price per unit compared with 135 per cent ad valorem at present. The cess rate for tobacco has been fixed at Rs 4,170 per thousand sticks plus 290 per cent ad valorem or 100 per cent of the retail sale price per unit.  So far, the highest rate was Rs 4,170 per thousand sticks plus 290 per cent ad valorem. The cess is levied over and above the highest GST rate of 28 per cent.