Big Relief For Tobacco Farmers: Arunachal Pradesh's CM says zero excise will boost tobacco trade and farmer incomes

Andhra Pradesh Chief Minister N. Chandrababu Naidu has welcomed the Central Government’s decision to reduce excise duty on unbranded raw tobacco products to zero.

Andhra Pradesh government welcomes the decision

He stated that the new regulations would provide substantial assistance to tobacco farmers and traders and exporters because unbranded tobacco products serve an essential function in the state agricultural sector.

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The Andhra Pradesh government has officially acknowledged the gazette notification that the Union Finance Ministry issued according to an official statement.

The notification describes the excise duty system which applies to unmanufactured tobacco products in order to eliminate existing industry confusion.

The gazette states that all retail sales of unbranded raw tobacco products will now incur zero excise duty. The Finance Ministry said the decision was taken to bring clarity, uniformity and transparency in tobacco taxation across the country.

Naidu stated that this situation had created substantial difficulties for agricultural workers and business owners because of the existing lack of legal definitions.

The purchase and sale of unbranded tobacco products created confusion which resulted in financial damages for businesses because there was no precise definition of trade activities.

Farmers encountered price uncertainty because of conflicting legal requirements while traders faced challenges due to unpredictable tax obligations.

Zero excise duty to simplify tobacco trade

The Central Government established 0 per cent excise duty for unbranded raw tobacco. The move is expected to simplify the tax system and remove difficulties caused by multiple classifications under excise laws.

The Chief Minister explained that the decision would provide better prices for tobacco farmers while it also helps traders and exporters. The established rules will decrease tax evasion possibilities according to him.

He described how taxation transparency would create advantages for legitimate enterprises while it fortifies the entire supply network.

Uniform implementation sought across India

The Andhra Pradesh government has expressed full support for the policy which will help prevent misuse of tax provisions and stop fraudulent practices that lead to illegal tax advantages.

The state has also urged the Central Government and the Central Board of Indirect Taxes and Customs to ensure that the new rules are implemented uniformly across all states.

The new excise duty changes will come into effect from February 1 2026. The revised rules will impose zero excise duty on unbranded tobacco products which distributors sell through retail channels according to HS Code 2401. The regulation applies to tobacco that farmers sell in bulk or sack form.

The government has announced that all tobacco products which carry brand names will remain subject to taxation. All tobacco products which retailers sell in small packages and which bear company brand names will face an 18 per cent excise tax.

The state government stated that these modifications will help the raw tobacco supply system while maintaining government income from commercial tobacco products. Officials believe the policy strikes a balance between supporting farmers and maintaining tax discipline.

The tobacco industry views the decision as beneficial to its operations because it brings advantages to farmers and small traders who experienced difficulties due to previous tax regulations.