Cigarette Price Hike: How much will your Marlboro, Gold Flake cost after Feb 1st?

Synopsis: From February 1, 2026, cigarette prices in India are expected to rise sharply as higher excise duties of Rs. 2,050–Rs. 8,500 per 1,000 sticks are imposed along with 40 percent GST. Depending on length and type, prices may increase by Rs. 3–Rs. 5.5 per stick, with premium cigarettes seeing the biggest impact.

From February 1, 2026, smokers in India are set to face higher cigarette prices as the government implements a major revision in excise duties on tobacco products. This move, combined with the existing Goods and Services Tax (GST), is expected to significantly increase the cost of cigarettes and other tobacco items. The change replaces the GST compensation cess and marks the first substantial adjustment in excise duties on cigarettes in nearly seven years.

What Rule Has Been Passed?

Parliament has approved the Central Excise (Amendment) Bill, 2025, significantly increasing taxes on tobacco products. Once the compensation cess ends, cigarettes will be taxed at a flat 40 percent GST with higher excise duty. The bill also raises excise duty on other tobacco products, with chewing tobacco increased from 25 percent to 100 percent, hookah or gudaku tobacco from 25 percent to 40 percent, and smoking mixtures for pipes or cigarettes from 60 per cent to 325 percent, substantially lifting the overall tax burden on legal tobacco products.

Major Changes in Excise Duty

The Ministry of Finance has introduced a new excise duty structure that varies depending on whether cigarettes are filtered or non-filtered and on their length. Excise duties will range from Rs. 2,050 to Rs. 8,500 per 1,000 sticks, with longer and premium cigarettes facing the highest levies. Short cigarettes will experience modest increases, while King Size and other premium variants will see sharper price hikes. According to Finance Minister Nirmala Sitharaman, the excise duty replaces the previous GST compensation cess, and revenue collected will be shared with the States at 41 percent from the divisible pool.

How This Affects Retail Prices

Translating the new excise structure into per-cigarette costs, short non-filter cigarettes up to 65 millimeters will see an added duty of roughly Rs. 2.05 per stick, while short filter cigarettes of the same length will incur about Rs. 2.10. Medium-length cigarettes measuring 65–70 millimeters will attract excise of around Rs. 3.60 to Rs. 4 per stick, and long, premium cigarettes between 70–75 millimeters will face an increase of approximately Rs. 5.40 per stick. For non-standard or unusual designs, another category carries a higher duty of Rs. 8,500 per 1,000 sticks, though most popular brands do not fall into this category.

Expected Price at the Counter

For a cigarette that currently costs Rs. 18, the 40 percent GST would first increase its price to about Rs. 19.70. Adding the excise duty of roughly Rs. 1–2 per stick, the final retail price is expected to rise to around Rs. 21–Rs. 22. Longer and premium cigarettes such as Gold Flake Premium, Red & White King Size, Classic, Marlboro, and flavored options like Ice Burst are likely to see hikes of Rs. 5–5.5 per stick. In comparison, shorter cigarettes, minis, and stubby non-filter sticks will experience smaller increases, making the price jump less noticeable for budget-friendly options.

GST and Total Tax Burden

The excise duty is applied on top of GST, which has been rationalized at either 18 percent or 40 percent, depending on the category of the product. Even with the new excise duty in place, total taxes on cigarettes account for roughly 53 percent of the retail price. This is still below the World Health Organization’s recommended benchmark of 75 percent, which is aimed at discouraging tobacco consumption.

Why the Government is Raising Duties

According to the Finance Ministry, the excise duty hike aims to curb tax evasion in the tobacco sector, increase government revenue, and align India’s tobacco taxes with global public health recommendations. Officials have also highlighted the growing burden of healthcare costs associated with tobacco-related illnesses, particularly cancer, as a key driver for increasing the tax.

Impact on Smokers

Longer, premium cigarettes will feel the highest impact due to larger excise levies, while short and non-filter sticks will experience smaller increases. The final price that smokers pay will also depend on how cigarette manufacturers respond. Some may absorb part of the increase for mass-market brands, while others may pass on the full excise cost for premium products. Prices could also be adjusted in phases.

From February 1, 2026, smokers should expect higher costs at the counter. While brand names remain important, the length and type of cigarette now play a more decisive role in determining price. Following the excise duty announcement, tobacco stocks reacted sharply, with ITC plummeting 14 percent in just two days, Godfrey Phillips by 21 percent, and VST Industries by 4 percent. 

Conclusion

From February 1, 2026, cigarette prices in India are set to rise meaningfully as higher excise duties are imposed alongside 40 percent GST. Premium and longer cigarettes will see the sharpest price increases, while shorter and non-filter sticks will face relatively smaller hikes.

With taxes now forming over half of the retail price, the new structure is expected to push up costs for smokers, influence consumption patterns, and keep pressure on tobacco companies’ pricing and margins in the near term.

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