New Excise Duty Slabs Announced for Pouch-Packed Tobacco/Gutkha Products

Excise Valuation Rules Amended to Clearly Cover Gutkha Products

The Central Government has issued Notification No. 04/2025–Central Excise dated 31 December 2025 under section 3A(3) of the Central Excise Act, 1944, prescribing revised capacity-based excise duty rates for machine-packed chewing tobacco, jarda scented tobacco and gutkha. Applicable to goods manufactured with packing machines and sold in pouches, the notification fixes monthly duty per packing machine based on two variables: the retail sale price (RSP) per pouch and the operating speed of the machine (pouches per minute). Separate rate slabs are notified for chewing tobacco/jarda and for gutkha, with higher rates applying as RSP and machine speed increase, including formula-based rates for machines operating at very high speeds. Clarifications define “packing machine,” include filter khaini within chewing tobacco, and treat each track or line of a multi-track machine as a separate machine for duty computation. The rates will apply from 1 February 2026, aligning duty with production capacity to curb evasion.

MINISTRY OF FINANCE
(Department of Revenue)

Notification No. 04/2025-Central Excise | Dated: 31st December, 2025

G.S.R. 956(E).— In exercise of the powers conferred by sub-section (3) of section 3A of the Central Excise Act, 1944 (1 of 1944), the Central Government, on being satisfied that it is necessary in the public interest so to do, hereby, specifies on, chewing tobacco falling under tariff item 2403 99 10 of the Fourth Schedule to the Central Excise Act, 1944 (1 of 1944) (hereinafter referred to as the Act), jarda scented tobacco falling under tariff item 2403 99 30 of the said Schedule of the Act and Gutkha falling under tariff item 2403 99 90 of the said Schedule of the Act (hereinafter referred to as notified goods), manufactured with the aid of packing machine and packed in pouches having retail sale prices as specified in column (2) of Table below, the rates of duty specified in the corresponding entries in column (3) or column (4) or column (5) or column (6) or column (7) or column (8) or column (9) or column (10), of the said Table, as the case may be, namely:-

TABLE

Where ‘S’ above denotes speed of the pouch packaging machine per minute for which rate of duty is to be determined; and

‘R’ above denotes retail sale price of the pouch for which rate of duty is to be determined.

Illustration 1. – The rate of duty per packing machine per month for a chewing tobacco or filter khaini or jarda scented tobacco having retail sale price of Rs. 8.00 (i.e. ‘R’) for upto 500 pouches per minute speed machine shall be = Rs. 0.38*8 =Rs 3.04 crores.

Illustration 2. – The rate of duty per packing machine per month for a chewing tobacco or filter khaini or jarda scented tobacco having retail sale price of Rs. 8.00 (i.e. ‘R’) for speed 2500 per minute and above shall be = Rs. (0.38*8*2500)/450 =Rs 16.88 crores.

Illustration 3. – The rate of duty per packing machine per month for a Gutkha having retail sale price of Rs. 8.00 (i.e. ‘R’) for upto 500 pouches per minute speed machine shall be = Rs. 0.41*8 =Rs 3.28 crores.

Illustration 4. – The rate of duty per packing machine per month for a chewing tobacco and jarda scented tobacco having retail sale price of Rs. 8.00 (i.e. ‘R’) for speed 2500 per minute and above shall be = Rs. (0.41*8*2500)/450 = Rs 18.22 crores.

Explanation. – For the purposes of this notification,-

(a) Chewing tobacco under tariff item 2403 99 10 includes filter khaini;

(b) “packing machine” includes all types of Form, Fill and Seal (FFS) machines and Profile Pouch Making Machine, by whatever names called, whether vertical or horizontal, with or without collar, single-track or multi-track, and any other type of packing machine used for packing of pouches of notified goods;

(c) if there are multiple track or multiple line packing machines, each such track or line shall be deemed to be one individual packing machine for the purposes of calculation of the duty liability;

(d) “retail sale price” means the maximum price at which the specified goods in packaged form may be sold to the ultimate consumer and includes all taxes, local or otherwise, freight, transport charges, commission payable to dealers, and all charges towards advertisement, delivery, packing, forwarding and the like and the price is the sole consideration for the sale:

Provided that where on the package, more than one retail sale price is declared, the maximum of such retail sale prices shall be deemed to be the retail sale price:

Provided further that if the notified goods are cleared in wholesale packages containing a number of standard packages with retail sale price declared on them, then, such declared retail sale price shall be taken into consideration for determining the rate of duty under respective serial numbers referred to in the Table.

2. The number of packing machines for the purpose of computation of the rate of excise duty specified in the Table shall be determined in terms of the Chewing Tobacco and Unmanufactured Tobacco Packing Machines (Capacity Determination and Collection of Duty) Rules, 2026.

3. This notification shall come into force on the 1^st day of February, 2026.

[F. No. CBIC-190349/72/2025-TRU]
DHEERAJ SHARMA, Under Secy.