Image Source : Maharashtra Times
Lok Sabha passed the Central Excise (Amendment) Bill, 2025, hiking duties on tobacco products like cigarettes, chewing tobacco, and gutkha post-GST cess expiry, ensuring no tax relief on sin goods. All gutkha packets must display MRP, maintaining fiscal bite while revenue shares with states.
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Bill Essentials
The legislation amends the 1944 Central Excise Act to reset duties after GST compensation cess ends (loans repaid in weeks), preventing cheaper tobacco amid health concerns. FM Nirmala Sitharaman emphasized no net tax cut—excise replaces cess, divisible with states per Finance Commission. Gutkha/pan masala face machine-speed-based levies; passed by voice vote amid Winter Session debates.
Key Highlights
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Duty Surge: Cigarettes Rs 2,700-11,000/1,000 sticks (vs Rs 200-735); chewing tobacco 100% (from 25%); unmanufactured 60-70%.
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Gutkha Rules: Mandatory MRP printing on packets; aligns with pan masala cess via production capacity/weight.
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Fiscal Logic: Protects tax incidence post-cess; revenue to divisible pool, not extra Centre burden.
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Health Angle: Discourages affordability; supports anti-tobacco push without price drops.
Sources: Reuters (RTRS), News on AIR, PRS India, Business Standard
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