GST Rate Restructuring for Tobacco Products: Centre Notifies New Classification w.e.f. from Feb 1, 2026 [Read Notification]

The Central Government has notified a GST ( Goods and Services Tax ) rates and classifications applicable to tobacco and allied products, to take effect from 1 February 2026.

The Ministry of Finance, through its Notification No. 19/2025- Central Tax (Rate) dated 31 December 2025, issued on the recommendations of the GST Council, has amended the principal rate notification to reclassify tobacco products across revised GST slabs.

Corresponding amendments have also been notified under the IntegratedGST (IGST) and Union Territory GST (UTGST).

The notification has separate and explicit classification of ‘Biris’. Biris falling under tariff headings 2403 19 21 and 2403 19 29 have now been included in Schedule II, drawing 9% CGST (18% total GST).

As per the notification, most other tobacco-related products have been consolidated under Schedule III, attracting a higher GST rate of 20% CGST (40% total GST). These include pan masala (2106 90 20), unmanufactured tobacco and tobacco refuse (2401), cigars, cheroots, cigarillos and cigarettes (2402), and other manufactured tobacco products and substitutes (2403) excluding biris.

Additionally, the notification puts modern tobacco and nicotine products clearly in the high GST category. Schedule III specifically includes items that contain tobacco or reconstituted tobacco designed for inhalation without flame (HSN 2404 11 00) and products that contain tobacco or nicotine replacements meant for inhalation without combustion (HSN 2404 19 00).

The removal of Schedule VII, which formerly provided a different GST rate for specific tobacco items, is yet another change.

The businesses who deal in tobacco, pan masala, cigarettes, and inhalation goods will have to re-evaluate pricing and supply contracts in order to keep up with the revised GST rates which comes into force on February 1, 2026.

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