Tobacco Industry

Budget Measures

Imposed a 15% surcharge on excise duty on cigarettes.

The duty on 'biris' would increase from Rs 6 to Rs 7 per thousand biris.

The total duty on pan masala would be 55%-60%.

Miscellaneous tobacco products like chewing tobacco would be charged to a total duty of 60%.

Budget Impact

Would adversely affect cigarette manufacturers as usual. ITC, VST, Godfrey Philips are some of the players who will take a hit (that was expected).

Industry wish list

Industry chambers are in favour that the specific excise duty structure based on the length of cigarettes should be continued.

The Confederation of Indian Industries (CII) in a pre-budget memorandum, have also recommended that the current slabs on cigarettes too should be maintained at current levels.

Key Positives

It’s a habit industry and hence, continues to thrive despite odds.

Being a habit industry, it finds it comparatively easy to pass on excise duty hikes.

Key Negatives

Heavily penalized through punitive taxation policies.

It has been proposed to ban public smoking, disallow tobacco companies from advertising in sports and cultural events. The bill if passed will put pressure on volume growth.