Government Releases FAQ on Machine-Based Levy for Chewing Tobacco, Jarda Scented Tobacco, and Gutkha

The Ministry of Finance has recently released a set of Frequently Asked Questions (FAQs) clarifying the new machine-based levy on tobacco, jarda scented tobacco, and gutkha. These rules, applicable from February 1, 2026, aim at improving the collection of the central excise duty. The FAQs give a clear guide for the manufacturers about the new rules, to help them comply with the machine-based levy system.

The new rules are applicable to products like chewing tobacco, including (filter khaini), jarda scented tobacco, and gutkha. These goods are now subject to a machine-based levy, which will be calculated based on the capacity of the packing machines. The annual capacity will be determined by multiplying the quantity of notified goods deemned to be deemed to be produced in a month by 12 months. After a factory inspection, the Deputy or Assistant Commissioner of the Central Excise will calculate the annual capacity of the production. The manufacturers must submit a mandatory declaration in Form CE DEC-01 within seven days of the new rules coming into effect.

The FAQs clearly explain that the businesses that are already registered under the central excise do not need to get a new registration. This means that the existing registered taxpayers can continue their work without having to register again under the new rules. The FAQs also explain the monthly returns, how to seal machines that are not in use, and how to calculate abatements.

For detailed information, refer to the official FAQs for more information.