Parliament approves Central Excise (Amendment) Bill, 2025: Tobacco products to get costlier

The Central Excise (Amendment) Bill, 2025 has been passed by the Parliament, paving the way for a significant increase in excise duties on tobacco products. The Rajya Sabha has approved the bill, which aims to amend the Central Excise Act, 1944, and empower the government to hike taxes on tobacco and related products.

The proposed amendments target a range of products, including cigarettes, cigars, hookah tobacco, chewing tobacco, and scented tobacco, with the objective of discouraging consumption and mitigating the adverse health effects of tobacco.
According to the bill, the excise duty on cigarettes will see a substantial increase, from a range of Rs 200-735 per thousand to Rs 2,700-11,000 per thousand. Similarly, duties on other tobacco products, such as chewing tobacco and hookah, will rise from 25% to 100% and 40%, respectively.

Finance Minister Nirmala Sitharaman assured that the increased revenue will be shared with states, as per the Finance Commission's recommendations, and emphasized that the bill will not adversely impact tobacco farmers or beedi workers. The government has introduced schemes, including crop diversification initiatives, to support farmers in transitioning to alternative crops.

The bill's passage is expected to provide the government with the necessary fiscal space to increase taxes on tobacco products, following the cessation of cess. The move is seen as a step towards reducing tobacco consumption and promoting public health.

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