New Delhi, Dec. 4 -- Finance Minister Nirmala Sitharaman introduced the Health Security Cess Bill, 2025, in Lok Sabha on December 4, which proposes a tax on demerit goods like pan masala.

The bill aims to discourage consumption due to associated health risks and will not apply to essential commodities. The cess will be taxed at a maximum rate of 40% under the Goods and Services Tax (GST), with revenues shared with states for health schemes.

It specifically targets pan masala production, based on factory capacity, and will be in addition to the GST. Sitharaman clarified that excise duty cannot be levied on pan masala, prompting the need for this separate cess.

The bill follows recent amendments to the Central Excise Act to levy excise d...