NEW DELHI, Dec 8: Parliament on Monday approved a Bill that seeks to impose cess on pan masala manufacturing units to augment resources for meeting expenditure on national security and public health.
Rajya Sabha returned the Health Security se National Security Cess Bill, 2025, to the Lok Sabha, which had cleared it on December 5.
The proposed Health and National Security Cess, which will be over and above the GST, will be levied on the production capacity of machines in pan masala manufacturing factories.
Currently, pan masala, tobacco and related products attract 28 per cent GST plus a compensation cess at a varied rate. With the end of the compensation cess levy, the GST rate will go up to 40 per cent.
Additionally, the excise duty will be levied on tobacco, and the Health and National Security Cess on pan masala.
Replying to the debate on the Bill, Finance Minister Nirmala Sitharaman said the cess is intended to serve the cost of national and health security.
"This cess aims to serve the cause of national security and also health security. It is not going to be on any essential commodities but it is going to be only on demerit goods," she stated.
Raising a dedicated stream of revenue for credible defence capability is very important, particularly in this era of hightech warfare, Sitharaman added.
Modern conflicts are dominated by precision weapons, autonomous systems, space assets and cyber operations and battlefield intelligence, all of which require a lot of capital-intensive expenditure, she stated. |
