New Delhi: Parliament on Monday cleared a bill seeking cess on manufacturing units of pan masala to augment expenditure on national security and public health. The Rajya Sabha returned the Health Security se National Security Cess Bill, 2025, to the Lok Sabha. The bill was also approved by the lower house on Friday.
Replying to the debate on the bill, Union finance minister Nirmala Sitharaman said that the cess is intended to serve the cost of national and health security. “The cess will be over and above the GST, and will be levied on the production capacity of machines in pan masala manufacturing factories,” she clarified in the House.
Earlier in the day, the cess bill was taken up in the Rajya Sabha, with the finance minister saying that it intends to create a ‘dedicated resource stream’ for two domains of national importance — health security and national security. “The purpose of this bill is to create a predictable, dedicated resource stream for two domains of national importance — one is health security, given the significant public health burden generally, as well as that which specifically arises from consumption of demerit goods like pan masala, and national security which requires a sustained investment to keep pace with evolving national security needs,” Sitharaman said.
While moving the bill in the House, Sitharaman also said that the cess won’t be imposed on essential commodities. “It is not on essential commodities, and does not envisage any future when it may have to be placed on an essential commodity. This tax or cess, is to be a deterrent to those who tend to use these demerit goods, and it certainly doesn’t burden ordinary citizens and their essential daily consumption,” the finance minister said.
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