Mon Dec 01 01:57:01 UTC 2025: Okay, here’s a summary and a news article based on the provided text:
Summary:
On December 1, 2025, the Indian government is set to introduce two new bills in the Lok Sabha to maintain tax revenue from “sin goods” like tobacco and pan masala. The Central Excise Amendment Bill, 2025, will replace the GST compensation Cess on tobacco products, while the Health Security se National Security Cess Bill, 2025, will levy a new cess on pan masala production and potentially other goods. This move aims to ensure the tax burden on these items remains consistent even after the GST compensation Cess expires and loans are repaid, with the new cess revenues earmarked for public health and national security. Businesses will be required to self-declare their manufacturing processes, with the cess calculated accordingly. The move comes after the GST Council decided to continue the compensation cess on these goods to repay outstanding loans. The total GST burden could go up to 40%.
News Article:
India to Introduce New Taxes on Tobacco, Pan Masala
New Delhi, December 1, 2025 – The Indian government is poised to introduce two new bills in the Lok Sabha today that will significantly impact the taxation of tobacco and pan masala products. Finance Minister Nirmala Sitharaman is scheduled to present The Central Excise Amendment Bill, 2025, and The Health Security se National Security Cess Bill, 2025, which aim to maintain tax revenue from these so-called “sin goods.”
The Central Excise Amendment Bill seeks to replace the current GST compensation Cess levied on tobacco products, including cigarettes, chewing tobacco, and cigars. The government has stated that this measure will provide the necessary fiscal space to adjust central excise duties on tobacco to maintain consistent tax rates.
The Health Security se National Security Cess Bill proposes a new cess on the manufacturing of pan masala, with the potential for it to be expanded to other goods in the future. The stated purpose of this cess is to generate funds for public health initiatives and national security.
Currently, tobacco and pan masala are subject to a 28% GST, plus the compensation Cess. After GST loans are paid back, which is soon to happen in December, the burden of GST and excise duties will be 40%.
The move comes after the GST Council’s decision on September 3rd to continue the compensation cess on tobacco and pan masala until loans taken to compensate states for GST revenue losses are repaid. The government emphasizes that these measures are designed to ensure a stable tax environment for these products and dedicate revenue streams to critical public services. Businesses will be required to file a self-declaration of all machines or processes for each factory or premises, and the cess would be calculated in the aggregate for each such location.
The introduction of these bills is expected to spark debate in parliament, with potential implications for the tobacco and pan masala industries and consumers.
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