Capacity-Based Excise Duty on Chewing Tobacco & Gutkha: CBIC Issues Advisory
The new regime comes into force on 1 February 2026
The Central Board of Indirect Taxes and Customs (CBIC) issued an advisory announcing the introduction of a capacity-based excise duty regime for chewing tobacco, jarda scented tobacco and gutkha, effective from 1 February 2026.
Scope and Applicability
As per the advisory, the Central Excise Duty on chewing tobacco, jarda scented tobacco and gutkha, when manufactured with the aid of packing machines and packed in pouches, shall be levied based on the capacity of production with effect from 1 February 2026.
No Fresh Registration Requirement
CBIC has clarified that existing Central Excise registered manufacturers will not have to apply for Registration to comply with the new law.
Mandatory Declaration
The mandatory declaration must include all details of Packing Machines located on the Manufacturer's premises, along with any other information as specified by the applicable rules. The declaration must be filed with the Jurisdictional Deputy/Assistant Commissioner of Central Excise, between 1 February 2026 and 7 February 2026.
Timelines
The advisory also lays down strict monthly compliance requirements:
| Particulars | Due Date |
| Payment of Central Excise Duty for the month | 6th day of the same month |
| Filing of Central Excise Statement | 10th day of the same month |
Duty in Other Cases
In cases not covered under the capacity-based levy, the excise duty shall continue to be levied on the assessable value, calculated on the basis of the RetailSelling Price (RSP), subject to permissible abatements.
Further Clarification
The advisory refers manufacturers to Notification No. 04/2025–Central Excise dated 31.12 2025, which provides the statutory framework for implementation of the capacity-based levy.
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