Government to Impose 88% Tax on Pan Masala
The government will levy an 88% tax on paan masala, Know the details: The government expects to collect ₹14,000 crore in 2026–27 from the health and national security cess imposed on pan masala manufacturers. The cess has been in effect since February 1, 2026 and is levied based on production capacity, apart from the 40% GST. The total tax on pan masala remains 88%. About ₹2,330 crore is expected to be collected in the last two months of the current financial year.
Where the cess money will be used: The funds collected will be shared with states and used for health awareness and other health-related schemes. The government says the cess is meant to ensure a steady flow of funds for health and national security.
GST Council decision: The move follows a GST Council decision in September 2025 to introduce new cess and excise duties after the GST compensation cess ends. The compensation cess will be phased out once ₹2.69 lakh crore in COVID-era loans are fully repaid by January 31, 2026.
