Centre Introduces Bills for Pan Masala Cess and Higher Tobacco Duties

The Union government introduced two Bills in Parliament to replace revenue from the soon-to-be-discontinued GST compensation cess on tobacco products.

Finance Minister Nirmala Sitharaman tabled the Health Security & National Security Cess Bill, 2025, and the Central Excise (Amendment) Bill, 2025.

The excise amendment allows higher duties on tobacco to maintain tax incidence, while the Health Security Cess levies a cess on machines and processes used in pan masala manufacture, augmenting funds for health and national security. 

The Bills respond to GST cess repayment obligations and aim to protect revenue streams while ensuring fiscal stability.