Will cigarette prices rise after government tables new Bills?:Find here how much tax you pay on cigarettes, pan masala gutka

After the Union Finance Minister Nirmala Sitharaman tabled Bills during the ongoing winter session of the Parliament to revise levies on tobacco and pan masala, there is a lot of confusion among the public whether cigarettes will become costlier after the bills are passed. Which new Bills did Sitharaman table in Parliament regarding tax on tobacco and pan masala?

Via these two bills, the government aims to revise levies on tobacco and pan masala.
For Cigarettes, the Central Excise Act, 1944 will be amended by Central Excise (Amendment) Bill to levy additional Cess. And for PAN Masala and Gutka, new Act will be introduced, ‘Health Security se National Security Cess Bill’
Types of taxes authorities levy on tobacco products?
Currently, the government levies following three types of taxes on tobacco products:
How much GST is levied currently? The government levies 28% GST on sin and luxury goods. The Central Government will increase this rate to 40% at a later date. What type of duties GoI impose currently? The duty imposed on cigarettes depends on the size of the stick, type of the tobacco product, etc. Eg, a cigarette of a length of 65 millimeters currently attracts duties of ₹200 on every 1,000 sticks. But according to the recently tabled ‘THE CENTRAL EXCISE (AMENDMENT) BILL, 2025’, the tax authorities would hike this to ₹2,700 per 1,000 sticks. While, on cigarettes of length of more than 65 mm but not more than 70 mm, the current duty is ₹250 per 1,000 sticks which the government would hike to ₹4,500 per 1,000 sticks. Current Proposed Duties On Tobacco Products:
When will the new rates be applicable? According to the copy of the bill, the new rates may ‘come into force on such date as the Central Government may, by notification in the Official Gazette, appoint.’
Will the new rates increase the prices of cigarettes? Albeit, these new rates are higher than the current ones, but according to CA, Deep Karodia, prices of cigarettes and other tobacco products will not increase much even after the ‘THE CENTRAL EXCISE (AMENDMENT) BILL, 2025’ would become a law.
CA. Deep Koradia says It seems the rate of cess under new levy will be notified same as there was in compensation cess Act – if done so, there won’t be major change in price of such goods (unlike GST, such cess or excise is only applicable on manufacturers etc, so cascading effect will occur, to that extent price may impact.)
According to the tax expert, the tobacco rates will go up once the new GST rate of flat 40% including Cess will be notified. Koradia adds The GST is proposed to be increased in the GST 2.0 amendments from 28% to 40%, (yet to be notified) – once notified, this will have impact on price of these products.