Hike in GST cess to cause cigarette prices to increase

After the GST Council raised the cess on cigarettes in addition to the highest rate of 28 per cent, ITC has increased the prices across all of its cigarette brands, ranging from four per cent to eight per cent increase.

Cigarette brands like Classic, Gold Flake, Navy Cut, Bristol, Flake, Scissors, and Capstan will see revisions to their prices with Classic and Gold Flake Kings witnessing the sharpest hike in prices.

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The introduction of the cess comes after the GST Council felt that the tax under tax was lower than the previous tax regime and was allowing cigarette companies receiving windfall profits as the Council had not factored the cascading effects of the taxes.

Once the new cess is implemented, the cess charged on cigarettes up to 65mm will be raised by Rs. 485 per 1,000 sticks for both filtered and nonfiltered while cess on cigarettes longer than 65mm will be raised by Rs. 792 per 1,000 sticks for unfiltered and Rs. 621 per 1,000 sticks for filtered cigarettes.

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