Confusion on taxation of Rolling Tobacco

[Anant Gupta]

Hi!

I wanted to understand how will the Central Excise Duty be calculated on Rolling Tobacco under the new regime. What I have understood so far is that the rate of duty is 325% on the abated value of the RSP. If that is the case, won't the taxation always be more than the RSP of the product?

AI Summary

Rolling tobacco excise duty is levied on abated value, not full RSP, amid high tobacco tax incidence.
Rolling tobacco is subjected to 325% ad valorem duty on the assessable value after statutory abatement of the Retail Sale Price under Section 4A, so the levy is not 325% of the printed RSP itself. The effective burden depends on the notified abatement and the tax-inclusive pricing structure. The revised excise rate is also explained as part of the policy response to the proposed withdrawal or phase-out of GST Compensation Cess, with the enhanced levy operating alongside GST, NCCD, Central Excise and other tobacco levies.