Tobacco and pan masala now face a 40% GST, higher excise duties, and RSP based valuation increasing tax incidence.
The 2025 reforms raise the GST slab for tobacco and pan masala to 40% and replace the GST Compensation Cess with higher basic excise duties and a capacity/weight linked health and security cess; Rule 31D shifts GST valuation from transaction value to Retail Sale Price/MRP, applying a formula to extract tax from the printed RSP and front loading tax collection while supplies outside MRP printing revert to transaction value treatment. (AI Summary)