CCTV Mandate, Higher Excise Duties For Chewing Tobacco And Gutkha From February 1

Manufacturers of chewing tobacco, gutkha and similar products will be required to install a functional CCTV system from February 1, covering all packing machines and to preserve the footage for at least 24 months, according to a government notification.

The notification also mandates that manufacturers disclose to excise authorities the number of packing machines and their capacities. They may claim abatement in excise duty if a machine remains non-functional for a minimum of 15 consecutive days, in line with the Chewing Tobacco, Jarda Scented Tobacco and Gutkha Packing Machines (Capacity Determination and Collection of Duty) Rules issued by the Finance Ministry.

The Rules apply to manufacturers that pack these products in pouches. “Those manufacturing in other forms (such as tins) have to pay the applicable duty on assessable value,” an FAQ released by the ministry said.

On December 31, 2025, the ministry also notified additional excise duties on chewing tobacco and related products, to be levied from February 1, over and above the existing 40 per cent Goods and Services Tax (GST).

Under the revised structure, chewing tobacco and jarda scented tobacco will attract an excise duty of 82 per cent, while gutkha will be subject to a 91 per cent levy.

The FAQ reiterated that every manufacturer operating a packing machine must install a functional CCTV system covering all packing machine areas and preserve the footage for a minimum period of 24 months.

Manufacturers of pouch-packed tobacco products will be required to disclose the number of machines, their technical specifications — including maximum rated capacity and gearbox ratios — as well as retail sale price details to the excise authorities.

The jurisdictional Deputy Commissioner or Assistant Commissioner of Central Excise will determine the annual production capacity after conducting a physical inspection of the factory and verifying the machines’ technical specifications.

As per the FAQ, annual production capacity will be calculated by multiplying the quantity of notified goods deemed to be produced in a month by 12. A fresh determination will be undertaken only if there is a change in key production factors, such as the number of machines or their maximum rated capacity.

Manufacturers will be required to pay the full duty for the entire month in which packing machines are installed.

The Rules allow manufacturers to claim abatement for the non-operation of any machine for a continuous period of at least 15 days, irrespective of whether the period falls within a single calendar month. To avail of this, manufacturers must inform the department at least three working days in advance, after which the excise authorities will seal the machine.

For de-sealing, manufacturers must notify the jurisdictional Deputy Commissioner or Assistant Commissioner of Central Excise at least three working days before operations are set to resume. De-sealing will be carried out in the presence of the jurisdictional Superintendent of Central Excise, the FAQ said.

In cases where machines are to be removed from the factory for sale or disposal, manufacturers must inform the jurisdictional Deputy Commissioner or Assistant Commissioner of Central Excise at least three working days prior to the proposed date of uninstallation, according to the FAQ.

(with PTI inputs)