Sales Tax on Tobacco Products

The provisions of Taxation Law (Amendment) Act, 2007 shall be effective from 1-4-2007.

Accordingly, state governments have got the power to impose sales tax on tobacco and tobacco products.  These products have be removed from the purview of "declared goods".  Further, the Amendment Act omits section 4 and the second schedule to the Additional Duties of Excise (Goods of Special Importance) Act, 1957.and amends the first schedule.

Enabling provisions have been made for the States to levy VAT on Tobacco.  Tobacco has been dropped from the First Schedule of the Additional Duties of Excise (Goods of Special Importance) Act, 1957 as also from the list of declared goods, to enable the States to levy VAT on Tobacco, at rate higher than 4%.