US EditionFM to Introduce Bill for ‘Health, National Security' Cess Today, as Tobacco Levy Set to Expire
The bill maintains or raises tobacco duties and allocates revenues to health and national security, ensuring stable tax incidence after the GST compensation cess ends.
- On Monday, Finance Minister tabled the Central Excise Bill, 2025 in Parliament to replace the temporary GST compensation levy with a permanent excise on tobacco.
- With the temporary compensation levy set to conclude, the government sought a permanent mechanism as the GST compensation cess supported pandemic-era loans and repayments with revenue neutrality goals.
- Detailed rate tables show new per-thousand and percentage levies, including Rs 3,000 and Rs 5,200 for filter cigarettes, Rs 5,000 for cigars, and pan masala machine-linked cess slabs up to Rs 8.49 crore.
- Markets reacted earlier in the day, nudging tobacco stocks lower as consumers receive no immediate price relief and manufacturers, distributors and tax planners adapt to new compliance rules.
- The shift positions cess proceeds for health and national security spending as the Centre repurposes revenue to fund public health and national security funds, while critics warn this risks boosting informal or illicit manufacturing and enforcement concerns in the tobacco consumers and smokeless tobacco sector.
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Centre introduces bill to impose new cess on pan masala, Gutka for national security, public health - The Tribune
After a 'sin tax' on tobacco-related items during the GST rationalisation exercise, Finance Minister Nirmala Sitharaman on Monday introduced 'Healthy Security se National Security Cess Bill, 2025', in the Lok Sabha. The Bill proposed a rigorous new tax regime on pan masala and gutkha manufacturers to fund defence and public health expenditures.
Parliament Winter Session Opens Today with Health and National Security Cess Bill as Tobacco Levy Nears Expiry
As Parliament opens its winter session, including the introduction of the Health and National Security Cess, its expected impact on tobacco and pan masala taxation, the shift away from the GST compensation cess, and the additional legislative items planned for the day.
FM to introduce Bill for ‘health, national security' cess today, as tobacco levy set to expire
The new levy is likely to ensure that the overall tax burden on cigarettes, gutkha, pan masala and other tobacco products is maintained at the current level even after the expiry of the GST compensation cess.
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