Andhra Pradesh Chief Minister N. Chandrababu Naidu on Wednesday welcomed the Central Government's decision to reduce the excise duty on unbranded raw tobacco products to zero.
He said that the move will benefit the unbranded tobacco trade in the state.
According to an official release, the state government has taken note of the gazette notification issued by the Central Finance Ministry in this regard.
The Finance Ministry issued this gazette clarifying the duty structure applicable to unmanufactured tobacco. As per the gazette, from now onwards, the excise duty on retail sales of unbranded tobacco will be zero. The Finance Ministry issued this gazette to ensure uniformity, clarity, and transparency in the taxation of tobacco sales.
The Chief Minister opined that this decision by the Central Government is a crucial step forward. Previously, due to the lack of a clear distinction between the purchase, sale, and trade of unbranded bulk tobacco, problems arose due to different provisions in the law. In the wake of farmers and traders suffering losses due to such ambiguous policies, the decision was taken to reduce the duty on unbranded products to zero per cent. This gazette will reduce the difficulties caused by different classifications in the imposition of excise duty.
Chief Minister Chandrababu Naidu said that this decision taken by the Central Government is beneficial to all tobacco farmers. He explained that it will not only ensure a good price for farmers but also benefit traders and exporters. He expressed the opinion that due to clear guidelines and regulations, excise duty evasion will be significantly reduced.
He stated that the Andhra Pradesh government supports this policy, which prevents obtaining tax benefits through fraudulent means.
The state government has appealed to the Central Government and the Central Board of Indirect Taxes and Customs to strictly implement this notification uniformly across the country.
These changes are effective from February 1, 2026. Tobacco products that are unbranded and not packaged for retail sale, falling under the HS 2401 code, will be subject to zero per cent excise duty. Tobacco sold by farmers in sacks will fall under this category.
However, tobacco products packaged in small packets for shops, and tobacco bags and packets with company brand names printed on them, will be subject to an 18 per cent excise duty, as stated by the Central Finance Ministry in the gazette.
The state government clarified that these latest changes in excise duty will provide relief to the raw tobacco supply system. It also revealed that there will be no impact on government revenue from products sold for commercial purposes.