Finance Minister Nirmala Sitharaman is set to introduce the Health and National Security Cess Bill in the upcoming Parliament Winter Session. The bill proposes replacing the existing GST compensation cess on tobacco, pan masala, and gutkha with a new cess based on the production processes of these goods to boost public health and national security funds.
The Government of India, through Finance Minister Nirmala Sitharaman, will introduce the Health and National Security Cess Bill, 2025 during the Winter Session of Parliament. This bill aims to repeal the current GST compensation cess levied on tobacco, pan masala, and gutkha products and replace it with a fresh cess calculated on production, machinery, or processes involved.
The objective is to raise additional revenues to augment expenditure on public health initiatives and national security. The legislation seeks to ensure a stable and growing revenue stream to address health-related challenges arising from consumption of harmful products like tobacco and pan masala, whose use contributes to major public health burdens.
Alongside, the Central Excise (Amendment) Bill, 2025 will impose excise duties on tobacco and tobacco-related products, replacing the GST compensation cess framework. The new cess will be levied on machines or other processes used in manufacturing specified goods, making tax collection more aligned with production intensity.
Key Highlights:
-
Health and National Security Cess Bill proposes cess based on production processes, repealing existing GST compensation cess on select products.
-
Targets tobacco, pan masala, and gutkha sectors to fund public health and national security.
-
Central Excise (Amendment) Bill to levy customs duties on tobacco and related products.
-
New levies aim for efficient tax structure ensuring sustainable revenue for health and security.
-
Bill introduced by Finance Minister Nirmala Sitharaman in Winter Session of Parliament, 2025.
-
Efforts aligned with government’s public health and safety objectives.
-
Winter Session agenda includes other major bills aimed at reforms and governance.
Source: NewsonAir, Times of India, Financial Express, Bloomberg, Economic Times]