Strongly supporting the campaign "say no to tobacco," Finance Minister P Chidambaram on Wednesday increased excise duty on cigarettes and bidis and gave no relief to pan masala containing tobacco.
"I strongly support the campaign 'say no to tobacco.' Hence, I propose to increase the specific rates of excise duty on cigarettes by about 5 per cent," he told the Lok Sabha while presenting the 2007-08 Budget.
Similarly, excise duty (excluding cess) on bidis, which was last fixed in 2001, will be raised from Rs 7 to Rs 11 per thousand for non-machine made bidis and from Rs 17 to Rs 24 per thousand for machine-made bidis.
Pointing out that there was an exemption from excise duty for unbranded bidis up to 20 lakh bidis in a year, Chidambaram said "complaints have been received of misuse of the exemption.
"This exemption will, henceforth, be available subject to fulfilment of the condition of declaration with the Department of Central Excise and regular monitoring."
Making it clear that pan masala containing tobacco will continue to bear an excise duty of 66 per cent, he, however, said in case of pan masala not containing tobacco, the duty will be reduced from 66 per cent to 45 per cent.
"I also propose to withdraw the exemption for pan masala containing tobacco and other tobacco products that is now given to units in the North Eastern states," the minister said.