Tobacco & Tobacco Products are a large contributor to the National exchequer by way of Central Excise and State taxes (VAT, Entry Tax etc). The combined tax revenue collected annually from tobacco products is more than Rs. 31,000 crores annually.
Cigarettes which bear the brunt of taxation in India are the major revenue contributor from the Tobacco sector.
* Includes Excise & State Taxes
Source: Cigarette Taxes paid by our member companies (representing >98% of the Industry) and estimates for others
Despite just 11% share of tobacco consumption, legal cigarettes contribute 87% of tax revenue.
Source: Ministry of Finance, Govt. of India and Industry estimates
Tax stability and moderation in duty rates on cigarettes would optimize revenue collections from tobacco sector by preventing shift in consumption from revenue-efficient legal cigarettes to cheaper, low quality and revenue inefficient forms of tobacco consumption and to illegal tax-evaded cigarettes.