Finance Minister Sitharaman introduces new Excise and Health Security Cess Bills on tobacco and pan masala

New Delhi, Dec. 1 -- union Finance Minister Nirmala Sitharaman on Monday introduced two significant bills in the Lok Sabha aimed at restructuring taxation on tobacco products and pan masala. The Central Excise (Amendment) Bill, 2025, proposes to replace the existing GST compensation cess on tobacco products, while the Health Security and National Security Cess Bill, 2025, seeks to impose a new cess on the manufacturing of pan masala.

In the Object and Reasons of the bills, Sitharaman explained that the Central Excise (Amendment) Bill would "give the government the fiscal space to increase the rate of central excise duty on tobacco and tobacco products so as to protect tax incidence," following the eventual discontinuation of the compensati...