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Home »Budgets » 2004-05 » Smokers to pay more
For last two years government has not increased the Central Excise Duty on cigarettes, but every July a packet of cigarettes of all categories had gone up as the industry increases the retail price to meet the revenue target negotiated with the government.

The Budget 2004-05 has decided tinker with the rate of central excise duty as the incidence of smuggling has been checked in FY 2003-04 and also the unorganised cigarette makers in Mardan have effectively been closed down.

The Finance Bill 2004-05 has raised central excise on upper market brands with retail price exceeding Rs 12 per 10 cigarettes to 63 percent of the retail price.

In the mid-market segment with cigarettes retail price of Rs 5.32 per packet of 10 cigarettes, the ad valorum duty charged shall now be Rs 2.27 per 10 plus 69 percent per incremental rupee thereof.

And, in the lower category where the retail price does not exceed Rs 5.32 per 10 cigarettes the duty has been fixed at Rs 2.27 per ten cigarettes.

The recent raids by the Central Board of Revenue officials to check cigarettes at Pan shops without the warning from Ministry of Health has paid dividends and the local industry has shown higher sale volume.

Copyright Business Recorder, 2004

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