The Government of India has issued Notification No. 19/2025 – Integrated Tax (Rate) dated 31 December 2025, introducing significant changes in Integrated GST (IGST) rates applicable to certain tobacco-related products. These amendments will come into force from 1 February 2026 and will directly impact importers, distributors, and businesses dealing in regulated and sin-tax goods.
At Meraki Carriers, we closely track such regulatory changes to help our clients stay compliant, cost-aware, and prepared.
Understanding the Context: Why This Notification Matters
IGST rates play a crucial role in:
- Import duty calculations
- Pricing and margin planning
- Compliance under GST and Customs laws
Any change in the applicable schedule—especially movement between tax slabs—can substantially alter the landed cost of imported goods.
This notification restructures IGST rate schedules for specific products, particularly those related to tobacco and its substitutes.
Key Changes Introduced in Notification 19/2025
1. New Entry Under Schedule II – 18% IGST
A new serial number 4A has been inserted under Schedule II (18%) covering:
- Biris
(HS codes: 2403 19 21, 2403 19 29)
This means biris will now attract 18% IGST, aligning them explicitly under Schedule II.
2. Expansion of Schedule III – 40% IGST
Under Schedule III (40%), several tobacco and tobacco-related products have been explicitly listed, including:
- Pan masala
- Unmanufactured tobacco and tobacco refuse (excluding tobacco leaves)
- Cigars, cigarettes, cheroots, cigarillos
- Other manufactured tobacco products (excluding biris)
- Tobacco extracts and essences
- Products containing tobacco or reconstituted tobacco intended for inhalation without combustion
- Products containing tobacco or nicotine substitutes intended for inhalation without combustion
These products will now uniformly attract 40% IGST, reinforcing the government’s high-tax approach toward tobacco and substitute products.
3. Omission of Schedule VII – 28% IGST
One of the most notable structural changes is the complete omission of Schedule VII (28%).
This indicates a policy consolidation, where products earlier falling under the 28% bracket are now either:
- Reclassified under 18%, or
- Shifted decisively to the 40% sin-tax category
This simplification reduces ambiguity but increases the importance of correct classification.
Effective Date: Plan Accordingly
🗓 Effective from 1 February 2026
All imports, inter-state supplies, and assessments on or after this date will be subject to the revised IGST rates, regardless of:
- Contract date
- Purchase order date
- Invoice date
Only the date of supply / import clearance will be relevant.
What Businesses Should Do Now
Meraki Carriers recommends immediate action on the following:
- Review product HS classification carefully
- Recalculate landed costs considering the new IGST slabs
- Update pricing and distributor agreements
- Coordinate with customs and GST consultants to avoid misclassification
- Prepare for scrutiny, especially for tobacco-related imports
Errors in classification or rate application in this category can lead to penalties, demand notices, and delays.
How Meraki Carriers Can Help
As your next-door logistician, Meraki Carriers supports clients with:
- Import classification review
- Pre-import tax impact analysis
- Customs and GST coordination
- Advisory support during regulatory transitions
We don’t just move cargo—we help you move through compliance with confidence.
Need clarity on how this IGST change affects your imports?
📩 Reach out to Meraki Carriers for shipment-specific guidance and regulatory support.
Because in today’s trade environment, compliance is not optional—it’s strategic.
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