Higher Taxes On Cigarettes & Tobacco From February 1, Pan Masala To Face New Health & Security Cess

New Delhi: The central government has announced higher taxes on cigarettes, tobacco, and related products starting February 1, 2026. Along with this, pan masala will be charged a new Health and National Security Cess. The Ministry of Finance has issued an official notification confirming these changes.

According to the government, these taxes will be charged in addition to Goods and Services Tax (GST). This means consumers will have to pay extra tax while buying tobacco products and pan masala.

Additional Excise Duty on Tobacco Products

Cigarettes, chewing tobacco, and other tobacco items will now attract an additional excise duty. This duty is separate from the existing taxes and will directly increase the final price of these products in the market.

The government believes that higher prices will discourage people from using tobacco. It also aims to generate extra funds for public welfare.

Health and National Security Cess on Pan Masala

Pan masala will be taxed under a new category called Health and National Security Cess. The government has said that the money collected through this cess will be used to strengthen health services and support national security needs.

This move is seen as part of a broader effort to address health risks linked to consumption of such products.

Tax Based on Production Capacity

Sources said the duty and cess will be calculated based on the production capacity of the machinery used to make these products. Simply put, companies with higher production capacity will have to pay more tax. This method is expected to prevent under-reporting of production and improve tax collection.

Bill Already Passed by Parliament

The proposal was presented and approved in the previous session of Parliament. The government stated that the new tax system is designed to reduce tobacco consumption, increase funds for healthcare, and boost revenue for national security.

Officials believe this step will also improve transparency in the tobacco and pan masala manufacturing sector.