Finance Minister Nirmala Sitharaman on Thursday proposed the Health Security se National Security Cess Bill, 2025, which will levy tax on goods like pan masala. Speaking in the Lok Sabha, Sitharaman noted that the Bill will not be levied on essential commodities, and the revenue from the levy will be shared with states for spending on health schemes.
āThis is a cess, and it is placed not on any essential commodity. The purpose of this Bill is to levy a cess on demerit goods, which are associated with significant health risks. We wish to impose such a cost, so that it is a deterrent, so people tend not to use it,ā the minister said.
Based on its consumption, pan masala will be taxed at the maximum 40 per cent rate under Goods and Services Tax (GST). There will be no impact of this cess on GST revenues, Sitharaman said.
The proposed Bill, which will be over and above the GST, will be levied on the production capacity of machines in pan masala manufacturing factories. āThe cess liability will be different for every factory, depending on their production capacity,ā the Finance Minister said.