Union Budget 2013: No smoke without ire: Govt hikes duty on cigarettes

NEW DELHI: P Chidambaram has proposed to increase specific excise duty on cigarettes by 18%. A similar increase has been proposed for cigars, cheroots and cigarillos. Analysts say manufacturers are likely to pass on a bulk of the additional cost to consumers. “Cigarette-makers, including ITC, have in the past exhibited an ability to increase prices whenever there is a hike in excise duty,” said an analyst at Angel Broking.
This is the second successive Budget in which cigarette prices have been hiked. Last year, Pranab Mukherjee had increased excise duty on some cigarettes, hand-rolled bidis, pan masala, gutka, chewing tobacco, un-manufactured tobacco and zarda-scented tobacco. ITC chairman Y C Deveshwar lauded Chidambaram’s Budget proposals.
“The passion, sincerity and commitment exuded by the finance minister in managing difficult economic circumstances will definitely go a long way in bolstering confidence in the economy,” he said. “The proposals represent a 360° intervention for stimulating growth in all sectors of the economy whilst fostering social equity and inclusion.”
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