The first question many Indians ask after every Union Budget is simple: what has become cheaper, and what has become more expensive? Products like alcohol and cigarettes usually dominate that conversation, and Budget 2026 is no exception. Following fresh tax tweaks announced this year, liquor prices are expected to rise across several states, while cigarettes and other tobacco products are also set to become costlier. For regular consumers, this translates into higher monthly spending, with a Rs 1,000 bottle likely to see a noticeable jump depending on where you live.
Why Prices Are Rising
Although alcohol taxation primarily falls under state governments, central budget decisions still influence retail prices through indirect levies and compliance costs.
In Budget 2026-27, the Tax Collected at Source (TCS) on alcohol scrap and mineral sales has been raised from 1 percent to 2 percent. While this may sound technical, industry experts say such changes often cascade down the supply chain, eventually pushing up shelf prices. On top of this, states are expected to revise excise duties, a common post-budget move, further adding to the burden on consumers.
As a result, a bottle that earlier cost Rs 1,000 is now expected to retail for around Rs 1,050 to Rs 1,100, and in some states even higher. Since excise structures vary widely, there will be no uniform pricing across India.
What It Means For Consumers
For India’s large base of regular drinkers, the impact will be immediate. Even a modest hike per bottle can significantly inflate monthly expenses. Analysts note that unless consumption drops sharply, government revenues are likely to rise, driven by higher tax collections from alcohol sales.
It isn’t just liquor that’s getting pricier. Cigarettes and other tobacco products have also been hit with increased taxes. Under the new framework, cigarettes attract nearly 40 percent GST, along with additional cess, excise duties and a per-stick charge. This effectively makes smoking a more expensive habit overnight.
Also Read: Budget 2026: Cigarettes Turn Costlier-Here’s How Much Rs 10 Cigarette Will Cost Now
There is, however, limited relief for bidi users, with prices remaining comparatively stable. The move is seen as an attempt to protect small-scale workers linked to the bidi industry. Health experts, meanwhile, continue to warn that all forms of tobacco carry serious risks, regardless of price.
In short, Budget 2026 redraws the inflation map for so-called “sin goods”, and for many households, it means tightening the purse strings just a little more.
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