18% Central Excise duty on unmanufactured tobacco withdrawn for unbranded, non-retail sale

Key facts

• The government withdrew the 18% Central Excise duty on unmanufactured tobacco or tobacco refuse that is unbranded and not packed for retail sale through a Gazette notification dated 1 February 2026.
• All other unmanufactured tobacco or tobacco refuse that are branded or retail-packed will continue to attract 18% excise duty.
• Imports of unmanufactured tobacco or tobacco refuse without a brand name and not packed for retail sale are also exempted from Customs countervailing duty equal to the central excise duty, reducing the applicable customs duty.
• Experts stated that the change is unlikely to affect tobacco stocks of companies like ITC and Godfrey Phillips since they deal in branded, retail-packed unmanufactured tobacco which remains subject to 18% excise duty.