POLICY BRIEF - Finance Act 2024: - Implications of Cigarette Tax Policy

Thus, the minimum price of a 20-stck Currently the average FED share in the consumer pack (excluding GST) has increased from Rs 108 to price of cigarettes is estimated to be 54.8 percent, Rs 150 per pack. [...] As shown in per 20-stick pack) if the printed retail price Figure 4, the majority of the brands (59 percent of (excluding GST) exceeds Rs 9,000 per thousand the economy brands) fall in the category of having cigarettes (or Rs 180 per 20-stick pack). [...] Similarly, the prices of the brands the price tier limit to Rs 12,500 per thousand whose current prices are close to the new cigarettes (or Rs 250 per pack). [...] The firms will have to increase the prices of The FED revenue target set by the these brands to at least Rs 150 per pack. [...] To address this, Tier threshold new Rs 250 per pack the government should consider adopting a two-pronged strategy of increasing the FED Price may rise without rate and developing necessary regulations to 59% of brands contributing to FED implement the provisions in the Finance Act aimed at combating the illegal cigarette trade.