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'Tax hike raises tobacco smuggling risk'
Financial Express Kochi
|January 05, 2026
AN UNPRECEDENTED TAX hike, coupled with a new excise duty structure on tobacco, could lead to a surge in illicit trade of cigarettes and result in significant tax revenue losses for the country, experts said.
Earlier this week, the finance ministry notified amendments to the Central Excise Act, imposing an excise duty ranging from ₹2,050 to ₹8,500 per 1,000 sticks based on cigarette length, effective February 1. This duty will be over and above 40% GST. This would imply the overall tax hike of 60-70%, varying across lengths. Currently, the overall tax of about 50-55%, depending on the length. The unexpected tax hikes proposed in the transition
This story is from the January 05, 2026 edition of Financial Express Kochi.
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