'Tax hike raises tobacco smuggling risk'

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.

- PRESS TRUST OF INDIA

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