Did Andhra Pradesh CM Support Zero Excise Duty on Unbranded Raw Tobacco?
Synopsis
In a significant move for the tobacco industry, Andhra Pradesh CM N. Chandrababu Naidu has applauded the Central Government's decision to revoke excise duty on unbranded raw tobacco. This pivotal policy shift is anticipated to bolster the local trade and provide much-needed relief to farmers and traders alike.
Key Takeaways
Zero excise duty on unbranded raw tobacco to support local trade.
Significant relief for farmers and traders .
Clarification on duty structure improves transparency .
Products with brand names will still face a 18% excise duty .
Policy aims to curb tax evasion .
Amaravati, Feb 4 (NationPress) - The Chief Minister of Andhra Pradesh, N. Chandrababu Naidu, expressed his approval for the Central Government's announcement to eliminate the excise duty on unbranded raw tobacco products, setting the rate to zero.
He emphasized that this initiative will significantly aid the unbranded tobacco market within the state.
As noted in an official statement, the state administration has acknowledged the gazette notification released by the Central Finance Ministry regarding this matter.
The Finance Ministry clarified the duty structure applicable to unmanufactured tobacco through this gazette. Moving forward, the excise duty on the retail sale of unbranded tobacco will be non-existent. This decision aims to promote uniformity, clarity, and transparency in the taxation of tobacco sales.
The Chief Minister remarked that this move by the Central Government represents a significant advancement. Previously, the absence of a clear distinction in the regulations surrounding the purchase, sale, and trading of unbranded bulk tobacco led to confusion and problems. Given the challenges faced by farmers and traders due to vague policies, the decision to set the excise duty on unbranded products at zero percent was made. This gazette will alleviate the complications arising from various classifications affecting excise duty.
Chief Minister Naidu stated that this decision by the Central Government is advantageous to all tobacco cultivators. He noted that it will not only secure fair pricing for farmers but also benefit traders and exporters. He is optimistic that the introduction of clear guidelines and regulations will lead to a substantial decrease in excise duty evasion.
He added that the Andhra Pradesh administration endorses this policy, which prevents tax benefits from being obtained through dishonest practices.
The state government has urged the Central Government and the Central Board of Indirect Taxes and Customs to implement this notification consistently across the nation.
These modifications are effective from February 1, 2026. Unbranded tobacco products that are not packaged for retail sale and fall under the HS 2401 code will be exempt from excise duty. This includes tobacco sold by farmers in sacks.
However, tobacco items that are packaged in small containers for retail shops, as well as tobacco bags and packets displaying company brand names, will incur an 18 percent excise duty, as detailed by the Central Finance Ministry in the gazette.
The state government clarified that these recent changes in excise duty will ease the raw tobacco supply chain and confirmed that government revenue from products sold for commercial purposes will remain unaffected.
Point of View
The decision to eliminate excise duty on unbranded raw tobacco is a strategic move aimed at stabilizing the agricultural sector in Andhra Pradesh. This change not only alleviates the burdens on farmers and traders but also promotes transparency in taxation. Such policies are essential for supporting local economies while ensuring fair practices in the market.
NationPress
21 Jun 2026
Frequently Asked Questions
What is the new excise duty on unbranded raw tobacco?
The new excise duty on unbranded raw tobacco is set to zero percent, as announced by the Central Government.
How does this decision benefit farmers?
This decision ensures fair pricing for farmers, helping them recover from losses caused by previous ambiguous policies.
Are there any products still subject to excise duty?
Yes, tobacco products packaged for retail sale and those with brand names will incur an 18 percent excise duty.
When will the changes take effect?
The changes will be effective from February 1, 2026.
What support does the state government provide regarding this policy?
The state government supports the policy and has appealed for uniform implementation across the country.
