Last updated: December 13th, 2024 2:21 PM

GST Rate and Cess for Tobacco and Cigarettes

Tobacco and tobacco products are estimated to generate around 18,000 crores of revenue for the government and nearly 5000 crores in foreign exchange. Though the prominence of the tobacco industry has steadily declined over the years, it continues to be a major revenue earner for the government through taxes. In this article, we look at the tobacco GST rate and cigarette GST rate, along with the cess rate and HSN code.

GST Rate for Tobacco

The Tobacco GST rate for all types of its products is 28%, except for tobacco leaves. GST rate for tobacco leaves is 5% under reverse charge. As GST for tobacco leaves is applicable under reverse charge, the recipient of the goods is required to pay the GST applicable directly to the Government. For example, if a tobacco manufacturing unit purchases tobacco leaves from a farmer, the tobacco manufacturing unit would be required to pay GST at the rate of 5% directly to the Government.

GST Cess for Tobacco Products

Tobacco products are one of the items that attract the maximum amount of GST cess. The GST cess rate for tobacco products ranges from 11% to 290%. Hence, its important for all persons supplying tobacco and tobacco products to be well aware of GST Cess on tobacco calculation, its rules and regulations.

GST Cess on Tobacco Calculation

The GST cess on tobacco products is designed specifically to address the health impacts of tobacco use and provide additional revenue for public health programs. The cess rates vary significantly depending on the type of tobacco product. For instance, unmanufactured tobacco products without lime tube attract a cess rate of 71%, while more processed products like pan masala containing tobacco, known as 'Gutkha', face a higher cess rate of 204%. The GST Cess on tobacco calculation involves adding this additional cess amount to the regular GST, making the final tax burden heavier on these harmful products.

Tobacco GST Rate and Cess for PAN, Gutkha, PAN, Chewing Tobacco and Tobacco Products

In the table below, we have given the list of items and their respective tobacco GST rates and cess,

Item Description	Tobacco GST Rate	Tobacco GST Cess
Tobacco and Tobacco Products
Unmanufactured tobacco (without lime tube) – bearing a brand name	28%	71%
Unmanufactured tobacco bearing a brand name	28%	65%
Tobacco refuse, bearing a brand name	28%	61%
Chewing tobacco (without lime tube)	28%	160%
Chewing tobacco (with lime tube)	28%	142%
Filter khaini	28%	160%
Jarda scented tobacco	28%	160%
Pan masala containing tobacco ‘Gutkha’	28%	204%

GST on Cigarettes

The GST on cigarettes applies to all types, including filter and non-filter cigarettes. The cigarette GST rate is intended to discourage smoking due to its health hazards and to generate significant revenue for the government. Additionally, a cess in a certain range is imposed on cigarettes, depending on the length and type, increasing the overall tax burden on this tobacco product.

GST on Cigarettes, Rates, and Cess

Below, we have given information regarding GST on cigarettes, along with rates and Cess, This image essentially sums up the GST on Cigarettes.

GST Rate and Cess for Other Tobacco Products

The cigarette GST rate and GST cess for other tobacco products like hookah, chewing tobacco, snuff and gutkha are as follows: Other Tobacco Products Click here to read on GST Rate for Mobile Phones, Smartphones & Accessories

HSN Code for Tobacco

Tobacco and tobacco products fall under Chapter 24 of the HSN Code. HSN Code is an internationally accepted system for classifying goods in the course of international trade. In the case of tobacco products, the following HSN code must be mentioned on the GST invoice based on the type of product sold:

GST Rate and HSN Code for Unmanufactured Tobacco

HSN Code	HSN Code Description	GST Rate
2401 10	Tobacco, not stemmed or stripped:	28%
2401 10 10	Flue cured virginia tobacco	28%
2401 10 20	Sun cured country (natu) tobacco	28%
2401 10 30	Sun cured virginia tobacco	28%
2401 10 40	Burley tobacco	28%
2401 10 50	Tobacco for manufacture of biris, not stemmed	28%
2401 10 60	Tobacco for manufacture of chewing tobacco	28%
2401 10 70	Tobacco for manufacture of cigar and cheroot	28%
2401 10 80	Tobacco for manufacture of hookah tobacco	28%
2401 10 90	Other	28%
2401 20	Tobacco partly or wholly stemmed or stripped:
2401 20 10	Flue cured virginia tobacco	28%
2401 20 20	Sun cured country (natu) tobacco	28%
2401 20 30	Sun cured virginia tobacco	28%
2401 20 40	Burley tobacco	28%
2401 20 50	Tobacco for manufacture of biris	28%
2401 20 60	Tobacco for manufacture of chewing tobacco	28%
2401 20 70	Tobacco for manufacture of cigar and cheroot	28%
2401 20 80	Tobacco for manufacture of hookah tobacco	28%
2401 20 90	Other	28%
2401 30 00	Tobacco refuse	28%

GST Rate and HSN Code for Cigarettes

HSN Code	HSN Item Description	GST Rate
2402	CIGARS, CHEROOTS, CIGARILLOS AND CIGARETTES, OF TOBACCO OR OF TOBACCO SUBSTITUTES
2402 10	Cigars, cheroots and cigarillos, containing tobacco:	28%
2402 10 10	Cigar and cheroots	28%
2402 10 20	Cigarillos	28%
2402 20*	Cigarettes, containing tobacco:	28%
2402 20 10	Other than filter cigarettes, of length not exceeding 65 millimetres	28%
2402 20 20	Other than filter cigarettes, of length exceeding 65 millimetres but not exceeding 70 millimetres	28%
2402 20 30	Filter cigarettes of length (including the length of Free the filter, the length of filter being 11 millimetres or its actual length, whichever is more) not exceeding 65 millimetres.	28%
2402 20 40	Filter cigarettes of length (including the length of Free the filter, the length of filter being 11 millimetres or its actual length, whichever is more) exceeding 65 millimetres not exceeding millimetres	28%
2402 20 50	Filter cigarettes of length (including the length of Free the filter, the length of filter being 11 millimetres or its actual length, whichever is more) exceeding 75 millimetres but not exceeding 85 millimetres	28%
2402 20 60	Filter cigarettes of length (including the length of Free the filter, the length of filter being 11 millimetres or its actual length, whichever is more) exceeding 75 millimetres but not exceeding 85 millimetres
2402 20 90	Other	28%
2402 90	Other:	28%
2402 90 10	Cigarettes of tobacco substitutes	28%
2402 90 20	Cigarillos of tobacco substitutes	28%
2402 90 90	Other	28%

GST Rate and HSN for Tobacco Products and Substitutes

HSN Code	HSN Item Description	GST Rate
2403	OTHER MANUFACTURE TOBACCO AND MANUFACTURED TOBACCO SUBSTITUTES; HOMOGENISED OR RECONSTITUTED TOBACCO; TOBACCO EXTRACTS AND ESSENCES
	Smoking tobacco, whether or not containing tobacco substitutes in any proportion:
2403 11	Water pipe tobacco	28%
2403 11 10	Hookah or gudaku tobacco	28%
2403 11 90	Other	28%
2403 19	Other:
2403 19 10	Smoking mixtures for pipes and cigarettes other than paper rolled biris, manufactured	28%
2403 19 21	Smoking mixtures for pipes and cigarettes other than paper rolled biris, manufactured without the aid of machine	28%
2403 19 29	Other	28%
2403 19 90	Other	28%
	Other:
2403 91 00	"Homogenised" or "reconstituted" tobacco	28%
2403 99	Other:
2403 99 10	Chewing tobacco	28%
2403 99 20	Preparations containing chewing tobacco	28%
2403 99 30	Jarda scented tobacco	28%
2403 99 40	Snuff	28%
2403 99 50	Preparations containing snuff	28%
2403 99 60	Tobacco extracts and essence	28%
2403 99 70	Cut-tobacco	28%
2403 99 90	Other	28%

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