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GST Council hikes cess on cigarettes

Finance minister Arun Jaitley said that the 28% GST rate on cigarettes and the 5% ad valorem on cess will stay. Photograph: (Reuters)

WION Web Team New Delhi, Delhi, India Jul 17, 2017, 03.41 PM (IST)

The GST Council has decided to hike the cess on cigarettes in a move that will generate an additional Rs 5,000 crore revenue for the government.

The GST Council has recommended raising the compensation cess on cigarettes.

Finance minister Arun Jaitley said that the 28% GST rate on cigarettes and the 5% ad valorem on cess will stay. Only the compensation cess has been reviewed.

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The proposed increase in compensation cess is Rs 485 per thousand sticks for cigarettes up to 65 mm length, Rs 621 for cigarettes between 65-70mm length and Rs 792 for cigarettes between 70-75 mm length.

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The new rates will come into effect from the midnight of Jul 17 and July 18.

 

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