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Compensation cess on tobacco products may stay till January
Financial Express Hyderabad
|November 12, 2025
THE GOODS AND Services Tax (GST) cess may continue, until January 2026 for tobacco and related products, until outstanding compensationrelated loans are cleared, as against the earlier projection of November 2025.
Following GST rate rationalisation under "GST 2.0," which took effect on September 22, 2025,the GST compensation cess was discontinued for many goods — but not for tobacco and related products (cigarettes, beedi, pan masala, chewing tobacco, etc.).
As the cess is now limited to only tobacco products, the cess collections have plummeted to %7,812 crore in October 2025 from %11,652 crore in September 2025, a decline of 33%.
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