Cigarette Prices Surge As Government Imposes Additional Excise Duty On Tobacco Products In Budget 2026

Cigarette prices across India have gone up sharply after the government imposed an additional excise duty on tobacco products under Budget 2026.

The new tax rates came into effect from February 1 and have already started impacting retail prices, according to distributors.

As a result of the hike, smokers are now paying noticeably more for both regular and premium cigarette brands.

Prices Increase by Rs 22 to Rs 55 per Pack

Distributors said cigarette prices have increased by at least Rs 22 to Rs 25 per pack of 10 sticks. In the case of premium cigarettes measuring 76 mm in length, the price rise is even steeper, ranging between Rs 50 and Rs 55 per pack, depending on the brand.

For example, a pack of Wills Navy Cut (76 mm), which earlier cost around Rs 95 for 10 sticks, is now expected to be priced at nearly Rs 120. Similarly, longer cigarettes of 84 mm length, such as Gold Flake Lights and Wills Classic variants, earlier sold at Rs 170 per pack, are likely to cost between Rs 220 and Rs 225.

Slim cigarettes have also become costlier. A pack of Classic Connect cigarettes (97 mm), which earlier carried a price tag of Rs 300 for 20 sticks, is expected to be sold at around Rs 350.

New Tax Structure Takes Effect

The price increase follows the introduction of an additional excise duty on cigarettes and tobacco products, along with a health cess on pan masala. These levies are over and above the highest Goods and Services Tax rate of 40 per cent.

Although cigarette manufacturers have not yet released revised maximum retail prices, distributors have already started billing existing stock to retailers under the old MRP but with the applicable 40 per cent GST.

Wholesale markets remained closed on Sunday, but distributors said fresh stock with updated MRPs is expected to be available from Monday onwards.

Supply Adjustments by Companies

Distributors also noted that some companies have temporarily put their stock releases on hold. These stocks are expected to be cleared only after billing under the new tax structure is completed.

According to industry sources, cigarette packs with revised MRPs may reach the market by the end of the month.

The latest price hike is expected to further reduce cigarette consumption, while also increasing revenue from tobacco taxation, in line with the government's public health objectives under Budget 2026.