Frequently Asked Questions (FAQs) on Machine-Based levy in case of Chewing Tobacco, Jarda Scented Tobacco and GutkhaGSTDated:- 1-1-20261. What are the effective duty rates of central excise on tobacco and tobacco products?
The effective duty rates on tob
Frequently Asked Questions (FAQs) on Machine-Based levy in case of Chewing Tobacco, Jarda Scented Tobacco and Gutkha
GST
Dated:- 1-1-2026
1. What are the effective duty rates of central excise on tobacco and tobacco products?
The effective duty rates on tobacco and tobacco products have been notified vide notification No. 03/2025-Central Excise and notification No. 04/2025-Central Excise both dated 31.12.2025. These duty rates will come into effect from 1st February, 2026.
2. Where are the Chewing Tobacco, Jarda Scented Tobacco and Gutkha Packing Machines (Capacity Determination and Collection of Duty) Rules 2025 provided for?
The Rules have been notified vide notification No. 05/2025-Central Excise (N.T.) dated 31.12.2025. These Rules will come into effect from 1st February, 2026.
3. What are the goods covered under these Rules?
These rules cover the goods notified under Section 3A of the Central Excise Act, 1944 vide notification
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Is there any abatement on retail sale price of the notified goods for the purpose of calculation of duty?
Yes, abatement is available and it has been factored in while notifying the applicable rates of duty for the products in Notification No. 01/2022-Central Excise (N.T.) dated 01.02.2022.
8. By what date must an existing manufacturer of the notified goods submit the declaration?
The declaration in Form CE DEC-01 has to be filed on the portal within seven days of coming into effect of the Rules i.e. by 7th February, 2026.
9. Is filing of FORM CE DEC-01 mandatory?
Yes, it is mandatory.
10. What are the parameters required to be declared?
The parameters include number of machines, specifications regarding the machines such as maximum rated capacity and gear box ratios and the details of retail sale prices as mentioned.
11. Why is a Chartered Engineer's certificate required?
This is required to help in providing technical information regarding number of track
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52 crores (higher of Rs 0.83 crores or 0.38*RSP is to be taken)
14. Can a taxpayer file a fresh declaration between filing the first one and before the issuance of order determining the annual capacity of production by the jurisdictional Deputy Commissioner of Central Excise or the Assistant Commissioner of Central Excise?
As per Rule 6 of the said Rules, a fresh declaration cannot be filed until the jurisdictional Deputy Commissioner of Central Excise or the Assistant Commissioner of Central Excise, as the case may be, has issued an order under Rule 8 with respect to the previous declaration.
15. How will the department determine the annual capacity of production?
The jurisdictional Deputy Commissioner of Central Excise or the Assistant Commissioner of Central Excise, as the case may be, will determine the annual capacity of production after conducting physical inspection of the factory and verification of technical specifications of the machines. The annual capacity of produ
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Deputy Commissioner or Assistant Commissioner of Central Excise?
Even if the taxpayer prefers to file an appeal, the duty has to be paid as per the determination by the jurisdictional Deputy Commissioner or the Assistant Commissioner of Central Excise, as the case may be, for the period subsequent to the order.
18. Will the determination be done every month by the jurisdictional officer?
No. A fresh determination will be done only if there is a change in the relevant factors of production affecting the annual capacity of production i.e. number of packing machines and maximum rated capacity of production of machines.
19. In case a manufacturer registered after 1st February 2026 installs machines and starts production on the 10th of a month, is the duty payable for the entire month?
Yes. As per the said Rule 13(3), the manufacturer has to pay the duty fully for the entire month in which the machines have been installed.
20. How will the number of machines be determined f
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hat are the conditions for claiming abatement?
In order to claim abatement, the manufacturer must intimate the department at least three working days in advance and the machine must be sealed by the department.
25. Are machines deemed to be operating even if not in use?
Yes. Any packing machine installed in a factory is deemed to be operating unless it is sealed in accordance with the provisions of the Rules.
26. What is the procedure for sealing of machines?
The manufacturer has to intimate the jurisdictional Deputy Commissioner or Assistant Commissioner of Central Excise, as the case may be, at least 3 working days before the non-operation of an installed machine for any continuous period of fifteen days or more.
27. How can a sealed machine be de-sealed?
The jurisdictional Deputy Commissioner or Assistant Commissioner of Central Excise, as the case may be, must be intimated at least 3 working days before the date from which the operations are intended to be resumed. The machi
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