Cigarette Prices Likely to Rise From February 1 as Government Revises Tobacco Tax

Cigarettes are set to become more expensive starting February 1, following the government’s notification of revised excise duties on cigarettes and other tobacco products. The new tax structure links cigarette duty directly to the length of the cigarette stick, which means longer cigarettes will now attract significantly higher taxes than shorter ones.

According to reports, cigarette prices could increase by 20–30 percent, depending on the category. While companies have not officially announced price revisions yet, the updated tax slabs make price hikes almost inevitable, especially for longer and premium cigarette variants.

How the New Cigarette Tax Structure Works

Under the revised rules, cigarette taxation is no longer uniform. Instead, it depends on two main factors:

1. Length of the cigarette stick (in millimetres)
2. Whether the cigarette is filtered or non-filtered

Simply put, the longer the cigarette, the higher the tax.

Tax on Cigarettes Up to 65 mm

Cigarettes measuring up to 65 mm fall under the lowest tax slab. The excise duty for this category ranges between Rs 2,700 and Rs 3,000 per 1,000 sticks, depending on whether the cigarette is filtered or not.

This works out to approximately Rs 2.7 to Rs 3 per cigarette in tax. These shorter cigarettes are expected to see smaller price increases compared to longer variants.

Cigarettes Between 65 mm and 70 mm

Cigarettes that are longer than 65 mm but up to 70 mm now face a higher excise duty than the smallest category. While the increase may not be as steep as in longer categories, it still raises production costs for manufacturers.

This category includes many commonly consumed mid-length cigarette brands, meaning consumers may start noticing gradual price changes over time.

Cigarettes Between 70 mm and 75 mm

For cigarettes measuring more than 70 mm and up to 75 mm, the excise duty jumps sharply to around Rs 7,000 per 1,000 sticks.

This translates to roughly Rs 7 in tax per cigarette, making these products considerably more expensive to manufacture and sell. Cigarettes in this category are more likely to see visible price hikes in retail markets.

Highest Tax Slab: “Other” Cigarettes

The highest duty applies to the “other” category, which typically includes longer, premium, or specially designed cigarettes that do not fit standard length classifications.

For these, the excise duty is a steep Rs 11,000 per 1,000 sticks, or about Rs 11 per cigarette in tax alone. Premium cigarette brands are expected to be most impacted under this slab.

What This Means for Retail Cigarette Prices

While cigarette companies have not yet officially revised prices, the math is straightforward: higher taxes mean higher costs.

However, prices may not rise overnight by the exact tax amount. Cigarette manufacturers have a few options:

• Absorbing part of the tax to retain customers, especially for popular mass-market brands
• Phased price increases spread over several months
• Higher price hikes for premium and longer cigarettes, where consumers may be less price-sensitive

Shorter cigarettes may see marginal increases, while longer and premium cigarettes are more likely to become noticeably costlier.

Impact on Consumers and the Market

For consumers, this change means spending more per pack, particularly if they prefer longer cigarette formats. For manufacturers, the revised duty structure increases pressure on margins, especially in categories where competition is intense.

From a policy standpoint, the move aligns with the government’s long-term strategy of discouraging tobacco consumption through higher taxation, while also increasing revenue.

Why Length-Based Taxation Matters

By linking taxes directly to cigarette length, the government has created a system that:

• Encourages consumption of shorter, lower-taxed products
• Makes premium and longer cigarettes less affordable
• Simplifies classification for taxation purposes

This approach ensures that luxury and premium cigarette products bear a higher tax burden than mass-market variants.

Final Thoughts

Starting February 1, smokers can expect cigarettes to become more expensive, especially longer and premium brands. While the exact price hike will vary by brand and category, the revised excise duty structure leaves little room for companies to avoid passing on at least part of the cost to consumers.

In short, shorter cigarettes will see smaller increases, while longer cigarettes could cost up to Rs 11 more per stick in tax, making smoking a costlier habit going forward.

Disclaimer: Smoking is injurious to health.

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