PTI, New Delhi. After the implementation of additional excise duty, the price of cigarettes has increased by a minimum of Rs 22 to Rs 25 per 10 cigarette packets from Sunday. According to distributors, premium cigarettes of 76 mm length have now become costlier by Rs 50 to Rs 55 per pack of 10 cigarettes, depending on the brand.
This decision has been taken after the government increased the tax on cigarettes for the first time in nearly seven years, bringing tobacco tax in India closer to global public health norms. The new taxes, approved by Parliament in December, will replace the existing GST Compensation Cess framework, which was in place since the implementation of the Goods and Services Tax (GST) in July 2017.
Although the companies are yet to announce the new maximum retail price (MRP), distributors are billing the old stock to retailers with 40 per cent GST.
Which cigarette became more expensive?
Due to the wholesale market being closed on Sunday, traders are hopeful that new goods with new prices will arrive in the market from Monday.
The popular mid-range cigarette ‘Wills Navy Cut’, which was earlier priced at Rs 95 per packet, can now be priced at around Rs 120 per packet.
Similarly, 84 mm length cigarettes like ‘Gold Flake Lights’, ‘Wills Classic’ and ‘Wills Classic Milds’, which were earlier priced at Rs 170 per packet, can now be priced at Rs 220 to Rs 225 per packet.
At the same time, the thin cigarette ‘Classic Connect’, which used to be available for Rs 300 in a packet of 20 cigarettes, can now cost around Rs 350. Traders say that by the end of the month the companies will send packets with new prices to the market.
Distributors fear increase in smuggling
Distributors fear that the increase in prices may increase smuggling and spread of counterfeit products. According to the All India Cigarette and Tobacco Distributors Federation (AICPDF), there are around 8,000-9,000 stockists of cigarette and tobacco products across the country.
AICPDF said, "Tobacco products are one of the few categories where small shopkeepers still matter. If this too is pushed into the hands of illegal networks, what will be left for honest retailers? It is not just a matter of tax – it is a matter of survival."
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