India raises tax on cigarettes

NEW DELHI (Reuters): India has raised the total tax on cigarettes resulting in an increase of as much as 792 rupees ($12.31) for every 1,000 cigarettes, adding about 50 billion rupees ($777 million) in revenues for the government, finance minister Arun Jaitley said.

The higher rate will be effective from July 18, Jaitley told reporters in New Delhi on Monday.

The new tax rate is part of a new Goods and Service Tax (GST) unveiled on July 1 in the country’s biggest tax reform in the 70 years since independence.After GST was rolled out, cigarettes initially became cheaper because the total tax burden had come down by about 6-7%. The tax was increased after an uproar from anti-tobacco and several health groups.