"Cigarettes will become costlier as smoking causes health hazards... Sometimes the poor, labourers and farmers also face such problems and because of this also the Cabinet has decided to hike VAT rates," Chief Minister Akhilesh Yadav said after a meeting of the state Cabinet, chaired by him.
Besides, it decided to ban sale of loose cigarettes in open market and issue a notification in this regard.
Cabinet has decided to hike VAT on cigarettes from 25 per cent to 40 per cent and on Pan Masala and Gutkha from 30 per cent to 40 per cent.
The hike in the VAT on these products will earn an additional revenue of Rs 200 crore for the state, he said.
The Chief Minister said the Cabinet decided to deploy 500 more ambulances and reconstruct dilapidated tehsil buildings.