Cigarette Prices Rise Up to 40% From Today: What’s Changed and Why It Matters

From February 1, several important financial and regulatory changes have come into effect across India, directly impacting household budgets, commuters, borrowers, and businesses. The most immediate hit comes as cigarette prices rise up to 40%, following a major overhaul in excise duty and GST rules. Alongside this, FASTag rules have been relaxed, commercial LPG cylinders have become costlier, and hopes of cheaper loans are building ahead of the RBI meeting.

Here’s a clear breakdown of the six key changes that matter right now.

1. Cigarette Prices Rise Up to 40% After New Tax Structure

Tobacco users will feel the sharpest pinch as cigarette prices rise up to 40% from today. The government has introduced a new excise duty based on cigarette length, ranging from ₹2.05 to ₹8.5 per stick. On top of this, a flat 40% GST is now applicable on cigarettes and other tobacco products like gutkha, pan masala, and khaini.

Earlier, these products attracted 28% GST plus a compensation cess. Although the cess has been removed, the new excise-plus-GST structure creates a “tax on tax” effect, significantly increasing the final retail price. Experts say this move aims to boost government revenue while discouraging tobacco consumption. Bidis, however, have received relief with GST reduced to 18%.

 2. FASTag Issuance Made Easier, No KYV Needed

In a big relief for new vehicle buyers, FASTag KYV verification is no longer required for new cars, jeeps, and vans. The National Highways Authority of India (NHAI) has discontinued the KYV process to reduce delays.

Existing FASTag users will also not need routine KYC checks unless there is a complaint related to misuse or incorrect issuance. This move is expected to improve user experience and speed up vehicle registrations.

3. Commercial Gas Cylinder Price Up by ₹50

Businesses face higher input costs as the 19-kg commercial gas cylinder price has increased by up to ₹50. In Delhi, the price is now ₹1,740.50, while in Chennai it has reached ₹1,899.50. Restaurants, hotels, and small food outlets are likely to feel the impact.

 4. RBI Meeting Ahead, Interest Rate Cut Likely

The RBI Monetary Policy Committee (MPC) will meet from February 4 to 6. Economists expect a 0.25% interest rate cut, which could bring the repo rate down to 5%. If announced, home loans, auto loans, and EMIs may become cheaper, offering relief to borrowers.

5. Air Tickets May Get Cheaper

Good news for flyers—aviation fuel prices have been reduced by nearly ₹1,000 per kilolitre. In Delhi, rates have dropped to ₹91,393.39. Lower fuel costs could translate into cheaper air tickets in the coming weeks.

 6. Aadhaar Authentication Mandatory for Property Deals

From today, Aadhaar authentication is compulsory for property registration in Uttar Pradesh and Karnataka. Buyers, sellers, and witnesses must verify identity via biometric machines, a step aimed at curbing fraud and benami transactions.

With cigarette prices rising up to 40%, costlier commercial LPG, and new compliance rules, February begins with mixed news for consumers. While smokers and businesses feel the pinch, easier FASTag rules, cheaper flights, and a possible RBI rate cut offer some relief in an otherwise inflation-sensitive environment.