The government has passed the Central Excise (Amendment) Bill, 2025, also known as the Excise Hike Bill, to increase taxes on many tobacco products. This step will make cigarettes, hookah tobacco, zarda and chewing tobacco more expensive. The purpose is to reduce tobacco use, protect public health and ensure steady revenue for both the Centre and the states.
Excise Hike Bill
Under the new rates, the excise duty on cigarettes now ranges from RS 2,700 to RS 11,000 per thousand sticks, much higher than the earlier RS 200 to RS 735 range. Chewing tobacco duty rises from 25% to 100%, hookah products go from 25% to 40%, and smoking mixtures jump from 60% to 325%. The government says the Excise Hike Bill will not harm farmers or beedi workers, as support and crop diversification schemes are already available.
This is not a new law, this is not an additional tax or something that the Centre is taking away. Many MPs here observed that this is a Cess. This is not a Cess, this is Excise Duty. Excise duty existed before GST.
The amount will be redistributed to the States as per the… pic.twitter.com/huod5upfx1
— Nirmala Sitharaman Office (@nsitharamanoffc) December 3, 2025
