New Delhi: After the additional excise duty implemented from February 1, there has been a sharp increase in the prices of cigarettes. According to people associated with the market, there has been an increase of Rs 22 to Rs 25 on cigarettes of different brands per pack of 10 sticks. The effect of the new tax system is clearly visible in the retail market.
Why did cigarette prices suddenly increase?
This increase in prices is due to the additional excise duty imposed on tobacco products by the government. Under the new system, 40 percent GST along with additional duty has now been implemented on cigarettes and tobacco products. Earlier, 28 percent GST and compensation cess were levied on these products.
What is the price of premium cigarettes now?
According to distributors, premium cigarettes of 76 mm length have now become costlier by Rs 50 to Rs 55 per pack of 10 sticks. There is a slight difference in prices according to different brands. The new prices have currently been implemented at the wholesale level.
What is the position of the companies regarding the new MRP?
The manufacturing companies have not yet formally announced the revised maximum retail price i.e. MRP. However, distributors have started billing the old stock at the new tax rate. Retailers are also getting old goods at increased prices.
When will the new stock come in the market?
Due to the wholesale market being closed on Sunday, new stock could not arrive. Distributors say that packs with the new MRP will start reaching the market from Monday. At the same time, new stock is expected to arrive on a large scale from the companies by the end of the month.
How much will which cigarette cost now?
According to distributors, Wills Navy Cut in 76 mm length, which was earlier priced at Rs 95, can now be priced at around Rs 120 per pack. 84 mm length cigarettes like Wills Classic, Gold Flake Lights and other brands in the same category can now reach Rs 220 to Rs 225 per pack. At the same time, the price of slim cigarettes like Classic Connect (20 sticks) can increase from around Rs 300 to Rs 350.
How much tax will be levied on cigarettes of different lengths?
Under the new tax structure, unfiltered cigarettes up to 65 mm in length will attract an additional duty of Rs 2.05 per stick. On filter cigarettes of the same length, it will be around Rs 2.10 per stick. There will be an additional tax of Rs 3.6 to Rs 4 per stick on cigarettes of 65 to 70 mm length and about Rs 5.4 per stick on long cigarettes of 70 to 75 mm.
What concern is there about smuggling and counterfeit cigarettes?
The All India Consumer Products Distributors Federation says the sharp rise in prices could increase the threat of illegal cigarettes and counterfeit products. According to the organization, 8 to 9 thousand stockists and lakhs of small retailers across the country are associated with this business, whose livelihood may be affected.
What will be the impact on small shopkeepers?
AICPDF President D. Patil said that tobacco products are one of the few businesses where small shopkeepers still play an important role. If this business goes into the hands of illegal networks then it will be difficult for honest retailers. He called it not just a tax issue but a question related to the existence of small traders.
