The Central Government has formally notified the Central Excise (Amendment) Act, 2025, after it received the President’s assent earlier today.
The Central Excise (Amendment) Act, 2025 marked a comprehensive revision of excise duty rates applicable to tobacco, cigarettes, cigars, nicotine products and other manufactured tobacco items. This is one of the most extensive rewrites to the tobacco excise framework in recent years.
The legislation amends the Fourth Schedule of the Central Excise Act, 1944 and replaces the existing tariff table under Section IV with an entirely updated structure. The revised duty regime now standardises excise duty on most categories of tobacco—both stemmed and unstemmed—at 70 per cent. This uniform rate applies to flue-cured Virginia tobacco, sun-cured tobacco varieties, Burley tobacco and tobacco used in the manufacture of biris, chewing tobacco, cigars and hookah tobacco. Tobacco refuse has been assigned a lower duty rate of 60 per cent.
For cigarettes and cigars, the new Schedule introduces sharply stratified duty slabs. Cigars, cheroots and cigarillos will attract 25 per cent duty or ₹5,000 per thousand units, whichever is higher. For cigarettes containing tobacco, the duty varies according to length. Non-filter cigarettes up to 65 mm will attract ₹2,700 per thousand sticks, while filter cigarettes are taxed between ₹3,000 and ₹7,000 per thousand, depending on their size. Some categories, such as premium or other cigarettes, carry a duty of ₹11,000 per thousand sticks. Cigarettes made from tobacco substitutes are now subject to a fixed rate of ₹5,000 per thousand.
Manufactured tobacco products witness the steepest increases. Smoking mixtures for pipes and cigarettes now attract a significantly higher rate of 325 per cent. Chewing tobacco, preparations containing chewing tobacco, jarda scented tobacco and similar items are taxed at 100 per cent. Other manufactured tobacco products—including snuff and preparations containing snuff—face duties ranging from 70 per cent to 125 per cent. Cut tobacco, however, continues to be taxed at a comparatively lower rate of 10 per cent.
A notable development in the amendment is the extension of excise duty to modern nicotine-delivery systems and non-combustion products. Items such as tobacco or nicotine-containing products intended for inhalation without combustion, oral nicotine applications and transdermal nicotine systems have been incorporated into the tariff structure. Most of these products have been assigned a 100 per cent duty, while certain entries have been left open for future rate notification.
The Bill was certified as a Money Bill under Article 110 of the Constitution and subsequently passed by both Houses of Parliament. As per the notification, the Act will come into force on a date separately notified by the Central Government in the Official Gazette. Once operationalised, the revised duty framework is expected to significantly influence pricing across the tobacco industry, both in traditional and emerging product categories.
Notification Details
Date: 11th December, 2025
