The domestic cigarette industry is bracing for a 6-8 per cent volume contraction in the next fiscal, following the imposition of additional excise duties and an increase in GST rates from February 1, Crisil Ratings said on Wednesday.
Currently, cigarettes are charged 28 per cent goods and services tax (GST), along with a varied compensation cess.
From February 1, the compensation cess component will be removed, and an additional excise duty (ranging from Rs 2.05 to Rs 8.5 per stick) will be levied, based on the length of the cigarettes.
Crisil said mid to premium cigarettes (more than 65 mm length) will be levied excise duty of Rs 3.6-8.5 per stick, while cigarettes in the mass segment (less than 65 mm length) will be levied Rs 2.05 – 2.1 per stick. Additionally, the GST applicable on the final price will increase to 40 per cent.
Though the duty hikes are lower in the mass segment (accounting for 40-45 per cent of the volumes), the players are expected to partially absorb the same​The domestic cigarette industry is bracing for a 6-8 per cent volume contraction in the next fiscal, following the imposition of additional excise duties and an increase in GST rates from February 1, Crisil Ratings said on Wednesday.
Currently, cigarettes are charged 28 per cent goods and services tax (GST), along with a varied compensation cess.
From February 1, the compensation cess component will be removed, and an additional excise duty (ranging from Rs 2.05 to Rs 8.5 per stick) will be levied, based on the length of the cigarettes.
Crisil said mid to premium cigarettes (more than 65 mm length) will be levied excise duty of Rs 3.6-8.5 per stick, while cigarettes in the mass segment (less than 65 mm length) will be levied Rs 2.05 – 2.1 per stick. Additionally, the GST applicable on the final price will increase to 40 per cent.
Though the duty hikes are lower in the mass segment (accounting for 40-45 per cent of the volumes), the players are expected to partially absorb the same ​Latest News [ SOBAN NEWS: International and National ]
