The Union Budget 2023 will be presented in the Parliament on February 1 by Finance Minister Nirmala Sitharaman, with many new tax reforms and rebates likely to be announced by the Centre which will pave way for the upcoming financial year.
One of the key changes expected in the Budget 2023 presentation is that FM Nirmala Sitharama will announce a price hike on tobacco and tobacco products, as well as a hike in the cigarette tax, which will lead to an increase in the prices of the product.
The cigarette prices and tax on tobacco products have been left untouched for around two years, but it is likely that this will change after the presentation of the Union Budget 2023 tomorrow. Here is all you need to know about the likely price hike of cigarettes.
The GST Council takes care of the tax imposed on tobacco and the regulation of its prices, but the central government also levies a National Calamity Contingent Duty (NCCD) on cigarettes. It is likely that the NCCD will change in the Budget 2023 announcement this year.
NCCD accounts for around 10 percent of the overall tax imposed on cigarettes, and it is likely that the Centre will raise it this financial year. The NCCD on cigarettes is usually paid by the manufacturing companies like ITC.
If there is a significant amount of NCCD imposed on cigarettes in the upcoming financial year, it is likely that companies like ITC will be passing on the price hike to the consumers, leading to a rise in the cost of cigarettes and tobacco products this year.
Apart from the rise in cigarette prices, other announcements expected from the Union Budget 2023 revolve around a likely announcement of the 8th pay commission, petrol and diesel prices, UPI and digital rupee-related incentives, and other tax-related schemes.
It must be noted that the Union Budget 2023-24 will be the last budget prepared by the current BJP-led government since the general elections in the country are due next year.
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