Union Finance Minister Nirmala Sitharamanwill on Friday move the Health Security and National Security Cess Bill, 2025, in the Lok Sabha for further consideration and passage during the ongoing Winter Session of Parliament.
The Bill, as stated by FM Sitharaman in the Lower House, aims to augment the resources for meeting expenditure on national security and for public health and to levy cess for the said purposes on the machines installed or other processes undertaken by which specified goods are manufactured or produced and for matters connected therewith or incidental thereto.
No 40% cess to replace existing GST levy
The legislation introduces a cess on pan masala as the existing compensation cess under the Goods and Services Tax (GST)regime is set to end. That portion will now shift into a 40 per cent cess.
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On Thursday, elaborating on the rationale behind the Bill, Sitharaman said, “A cess is being imposed because the GST system taxes consumption, and even today, pan masala is taxed under GST at 28 per cent plus compensation cess. Since the compensation cess is going to end, that portion will shift into a 40 per cent cess. However, many types of pan masala still do not fall under the tax net because GST is applied on the basis of consumption. Under GST, there is no tax based on production capacity or output. That is why tobacco is taxed under GST and was also brought under excise duty recently.” She further noted that excise duty taxes production, but pan masala cannot be taxed on production because it is not classified as an excisable product. “So, while cigarettes were brought under excise duty and ideally pan masala should have been included too, it cannot be added because it is not in the excise category. Therefore, cigarettes now face excise duty, as they should, with more than 40% tax, so they are not cheaply available, but pan masala cannot be taxed this way. Hence, through the new law, the government is imposing a production-based tax in the form of a cess,” the Finance Minister added.
Government to present upcoming agenda
On the fifth day (December 5) of the Winter Session, Union Minister Kiren Rijiju will make a statement regarding Government Business for the week commencing December 8.
Among Private Member Bills, MP D Ravikumar is likely to introduce the Constitution (Amendment) Bill, 2024 (Insertion of new article 21B), which aims to introduce the right to safe, healthy and sustainable climate, and the Constitution (Amendment) Bill, 2024, for the substitution of a new article for Article 129.
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In the Rajya Sabha, Union Minister Piyush Goyal is likely to move a motion for the election of a member to the Rubber Board, while L Murgan will make a statement regarding Government Business for the week commencing December 8.
Earlier on Thursday, the Parliament approved the Central Excise (Amendment) Bill, 2025, with the Rajya Sabha returning it to the Lok Sabha. FM Nirmala Sitharaman, while replying to the discussion in Rajya Sabha, said the higher duties on cigarettes will be shared with the states. |
