GST Council has decided to hike cess on cigarettes in its meeting held in New Delhi this evening. The council took the decision after reviewing the compensation cess rates on cigarattes. <br/><br/>The new rate will come into effect from midnight tonight. Briefing reporters after the meeting, Finance Minister Arun Jaitley said that Cess on cigarettes of up to 65 mm has been raised by 485 rupees per thousand sticks and on those exceeding 65 mm by 792 rupees per thousand sticks. <br/><br/>The change in cess would fetch five thousand crore rupees additional revenue. He said, the next meeting will take place in first week of next month to review progress of new indirect tax regime GST.<br/><br/>Our correspondent reports that the method of calibrating the Compensation cess on cigarettes by the fitment committee had not taken into consideration the cascading of taxes. <br/><br/>As a result, the total tax incidence on cigarettes in GST regime had come down, as compared to the total tax in pre-GST regime. While any reduction in Tax incidence on items of mass consumption would be welcome, the same would be unacceptable in case of demerit goods like Cigarettes.<br/>