Cigarette Price Hike Alert: ITC Raises Rates Up to 41% After Tax Increase; Check How Much You'll Pay

Cigarette buyers across India are going to feel the pinch as ITC Ltd has sharply increased cigarette prices across major brands such as Gold Flake, Classic, and Classic Connect, after higher excise duties and taxes effective February 1st 2026.

The latest revision shows a cigarette price hike ranging between 19% and 41%, with fresh shipments carrying the new cigarette prices expected to reach retail markets soon. Reports also indicate that some retailers have already begun selling existing stock at revised, higher rates.

Gold Flake and Classic cigarette prices jump sharply

According to analyst channel checks cited in NDTV Profit reports, the biggest cigarette price increase has been seen in premium segments:

The Gold Flake of 10-pack cigarettes now costs Rs. 240, which was earlier priced at Rs. 170, while the Classic variant of the 20 piece pack, which is now sold at Rs. 340, will cost Rs. 480 after the price revision

Gold Flake Superstar Value pack, previously available for Rs. 59, will now cost Rs. 70 for a 10-cigarette pack.

Why are cigarette prices rising in 2026

The cigarette price hike in India came first after the GST reforms when the GST on the Sin Goods were increased to 40% from the earlier 28% . post that the sharp increase in excise duty, which added roughly Rs. 2 to Rs. 11 per stick, pushing overall pack prices higher by 15% to 40%.

Other tobacco players, including Godfrey Phillips India, have also revised cigarette prices, a sector-wide pricing response to taxation.

Impact on Cigarette Stocks

After the reports doing rounds regarding the fresh cigarette price hike, tobacco stocks saw strong buying interest on the stock market. The ITC share price rose nearly 2% on February 18.

Other cigarette stocks also rallied after manufacturers moved to pass on the higher tax burden to consumers. Shares of Godfrey Phillips India Ltd climbed sharply, with gains exceeding 10% intraday amid expectations of improved margin protection.

By around 2:30 pm, ITC was trading 2.04% higher at Rs. 332.10, while Godfrey Phillips India surged to approximately Rs. 2,452.40, up 386 points or 18.71%, becoming one of the top gainers in the segment.

Market participants view the price hikes as a strategic move to safeguard profitability, especially since the cigarette business contributes nearly 40% of ITC's total revenue. While higher prices could lead to some short-term demand pressure, analysts believe the ability to pass on costs will support earnings stability and protect operating margins in the coming quarters.

Once fresh stock with updated MRP becomes widely available, the full impact of the cigarette price hike on consumer demand and sales volumes will become clearer.