GST on tobacco is 40% for cigarettes, cigars, chewing tobacco, gutkha, hookah tobacco and pan masala, and 18% for biris. These goods moved out of the old 28% rate plus compensation cess, and the compensation cess on them became nil at the same time.
For these goods, GST is worked out on the retail sale price printed on the pack rather than the invoice value. The central government also levies separate duties and a cess outside GST. This page lists the codes, the valuation method, a distributor's bill and the related items such as supari. Liquor is covered on the alcohol page, and the full slab list on the GST rate list.
Tobacco and pan masala: codes and GST rates
Item / HSN / GST- Cigarettes, cigars, cheroots40%No compensation cess now
- Chewing tobacco, zarda, khaini40%Manufactured tobacco
- Gutkha and similar products40%Manufactured tobacco
- Pan masala40%Demerit list
- Biris18%Separate lower rate
- Hookah and smoking mixtures40%Manufactured tobacco
- Products for inhalation without combustion40%Heated tobacco and similar
- Tobacco leaves5%Leaf tobacco
- Unmanufactured tobacco and refuse40%Other than leaves
- Supari (dried areca nut)5%Not pan masala
- Smoking pipes and holders40%Demerit list
Quick facts
GST rate
40% on cigarettes, pan masala and manufactured tobaccoBiris
18%Compensation cess
Nil on these goods nowValuation
Retail sale price: tax = RSP x 40 / 140Other levies
Additional excise and a separate cess, outside GSTDigits to print
4 digits up to Rs 5 crore turnover, 6 above
Gst on tobacco products: code table
| Product | HSN | GST |
|---|---|---|
| Tobacco leaves | 2401 | 5% |
| Unmanufactured tobacco, tobacco refuse | 2401 | 40% |
| Cigars, cheroots, cigarillos | 2402 10 | 40% |
| Cigarettes | 2402 20 | 40% |
| Biris | 2403 19 | 18% |
| Chewing tobacco, zarda, khaini | 2403 99 | 40% |
| Hookah or gudaku tobacco | 2403 11 | 40% |
| Pan masala | 2106 90 20 | 40% |
| Heated tobacco and inhalation products | 2404 | 40% |
| Smoking pipes | 9614 | 40% |
| Supari | 0802 80 | 5% |
Cigarette gst rate after the change
Cigarettes moved from 28% GST plus compensation cess to 40% GST with the cess at nil. The central government also charges additional excise duty on cigarettes, which is not GST and is not shown as GST on the invoice. Retail prices may not have changed much, because the total of all levies was kept broadly similar.
Retail sale price valuation
For pan masala, cigarettes and other notified tobacco products, GST is calculated on the retail sale price declared on the package. The tax included in the retail price is RSP x 40 / 140. On a pack with a retail price of Rs 140, the GST is Rs 40 and the taxable value Rs 100. This means discounts given down the chain do not reduce the tax.
Biris and leaf tobacco
Biris are taxed at 18%, a lower rate than other tobacco products. Tobacco leaves sold by farmers are 5%, and a buyer may have to pay that under reverse charge when buying from an agriculturist; check the reverse charge entry. Unmanufactured tobacco other than leaves is 40%.
Supari hsn code
Dried areca nut (supari) is 0802 80 at 5%. Once it is mixed with lime, catechu and flavours into pan masala, it becomes 2106 90 20 at 40%. Sweet supari mixes without tobacco may still count as pan masala depending on their make up; check the product. See dry fruits.
Distributor's invoice
Distributor to a retailer: Cigarettes, HSN 2402 20, total retail sale price of the lot Rs 70,000. Taxable value Rs 50,000. CGST 20% Rs 10,000. SGST 20% Rs 10,000. Total Rs 70,000.
A shop selling these goods must charge 40% on the retail price basis even if it sells at a discount. Registration, record keeping and machine rules may apply to manufacturers of these goods; check the special procedures.
Tobacco rates and valuation are explained here in general terms based on the change that took these goods to 40%. Special procedures and other levies apply to this trade, so read the newest notifications on the GST portal and take advice from a GST practitioner or chartered accountant before dealing in these goods.
Frequently asked questions
How much GST is charged on cigarettes?
40%, with compensation cess at nil. Additional excise duty is levied separately.
What is the GST on pan masala?
Pan masala under 2106 90 20 is taxed at 40%.
What is the GST on biris?
Biris are taxed at 18%.
How is GST calculated on tobacco products?
On the retail sale price printed on the pack. The GST included is the retail price multiplied by 40 and divided by 140.
What is the supari hsn code?
Dried areca nut is 0802 80, at 5%.