The central government has completely removed the excise duty on raw tobacco products, and the Andhra Pradesh government has appealed to the Central Board of Customs to implement this decision uniformly across the country.
The central government has good news for tobacco lovers….Chief Minister Chandrababu welcomed the central government’s decision.
BUREAU CHIEF
RAJA PENTAPATI AMARAVATI
FEBRUARY 4 BHARAT NEWSChief Minister Chandrababu Naidu welcomed the Central Government’s decision to reduce the excise duty to zero on unbranded raw tobacco products.
He expressed the opinion that this would benefit the unbranded tobacco trade in the state. The Andhra Pradesh government has taken into consideration the gazette issued by the Union Ministry of Finance in this regard. The Finance Ministry issued this gazette clarifying the duty structure applicable to unmanufactured tobacco (HS Code 2401). From now on, the gazette states that the excise duty on retail sales of unbranded tobacco will be zero.
The Central Finance Ministry issued this gazette to ensure uniformity, clarity, and transparency in the taxation of tobacco sales. The Chief Minister opined that this decision taken by the Central Government is a crucial step forward. Previously, due to the lack of a clear distinction between the purchase and sale of unbranded bulk tobacco, problems arose due to different provisions in the law.
In the wake of farmers and traders suffering losses due to these unclear policies, the decision was taken to reduce the duty of unbranded products to zero percent. This gazette will reduce the difficulties caused by different classifications in the imposition of excise duty.
Chief Minister Chandrababu Naidu clarified that this decision taken by the Central Government is beneficial to all tobacco farmers. He explained that it will not only ensure a good price for farmers but also benefit traders and exporters. He expressed the opinion that due to clear guidelines and regulations, excise duty evasion will be significantly reduced.
The Andhra Pradesh government has appealed to the Central Government and the Central Board of Indirect Taxes and Customs to strictly implement this notification uniformly across the country.
A zero percent excise duty will apply to unbranded tobacco products not packaged for retail sale, which fall under the HS 2401 code. Tobacco sold by farmers in sacks will fall under this category. However, the Central Finance Ministry stated in its gazette that an 18 percent excise duty will apply to tobacco products packaged in small packets for shops, and to tobacco bags and packets bearing a company brand name.
The state government clarified that the latest changes in excise duty will provide relief to the raw tobacco supply system. It also revealed that there will be no impact on government revenue from products sold for commercial purposes. Previously, the rules were unclear regarding whether retail sales of raw tobacco were taxable or whether the tax rate changed depending on the packaging.
The Finance Department stated that these doubts have been cleared with the current gazette notification. The notification states that zero excise duty will apply to the retail sale of unbranded, unpackaged tobacco from February 1, 2026. The government has stated that an 18 percent excise duty will apply to all other tobacco products, thereby reducing disputes that arise during auditing and billing.
This decision will benefit farmers and small traders. Since farmers sell the tobacco they cultivate in bulk in sacks without any branding, the notification states that no duty will apply to it. The government clarified that this will directly benefit them.
Andhra Pradesh
