Budget 2026: Seeks to prescribe effective rates of NCCD on chewing tobacco, Jarda Scented tobacco and other Tobacco products.
The Central Government, through Notification No. 01/2026–Central Excise dated 1 February 2026 issued by the Ministry of Finance, has granted a partial exemption from National Calamity Contingent Duty (NCCD) on specified tobacco products. Exercising powers under the Central Excise Act, 1944 read with the Finance Act, 2001, the notification reduces the effective NCCD rate on chewing tobacco, jarda scented tobacco, and other goods falling under tariff item 2403 99 to 25%. The exemption operates by waiving so much of the NCCD as is in excess of the specified rate, thereby capping the duty burden on these products. This measure represents a calibrated adjustment rather than a full exemption, maintaining a significant duty incidence while offering relief from higher NCCD rates prescribed earlier. The notification is scheduled to come into force from 1 May 2026, providing manufacturers and stakeholders advance clarity on the revised excise duty structure applicable to tobacco products.
GOVERNMENT OF INDIA
MINISTRY OF FINANCE
(DEPARTMENT OF REVENUE)
Notification No. 01/2026-Central Excise | Dated: 1st February, 2026
G.S.R. (E).- In exercise of the powers conferred by sub-section (1) of section 5A of the Central Excise Act, 1944 read with section 136 of Finance Act, 2001 (14 of 2001), the Central Government, on being satisfied that it is necessary in the public interest so to do, hereby exempts the excisable goods of the description specified in column (3) of the Table below and falling within the Chapter, heading or sub-heading or tariff item of the Fourth Schedule to the Excise Act, as specified in the corresponding entry in column (2) of the said Table, from so much of the National Calamity Contingent Duty specified thereon in the Seventh Schedule to the Finance Act, 2001 as is in excess of the amount calculated at the rate specified in the corresponding entry in column (4) of the said Table:
Table
| Sl. No. |
Heading or sub- heading or tariff item |
Description of goods | Rate of duty |
| (1) | (2) | (3) | (4) |
| 1. | 2403 99 10 | Chewing tobacco | 25% |
| 2. | 2403 99 30 | Jarda scented tobacco | 25% |
| 3. | 2403 99 90 | All goods | 25% |
2. This notification shall come into force on the 1stday of May, 2026.
[F. No. 334/05/2026-TRU]
(Dheeraj Sharma)
Under Secretary to Government of India
