Why India may raise GST on cigarettes and other tobacco products

India is considering increasing GST on tobacco products, including cigarettes, after the cessation of the compensation cess in 2026. A proposal to elevate GST to 40% plus additional excise duty aims to maintain tax revenue. A ministerial group will review post-2026 compensation cess scenarios.

​India is considering increasing GST on tobacco products, including cigarettes, after the cessation of the compensation cess in 2026. A proposal to elevate GST to 40% plus additional excise duty aims to maintain tax revenue. A ministerial group will review post-2026 compensation cess scenarios.