The government has introduced two bills in the Lok Sabha to impose new taxes on cigarettes and pan masala
Cigarette companies are targeted in the market today. Tax load may be increased on tobacco, Cigarette, and pan masala companies. The government on Monday introduced two new bills in the Lok Sabha to ensure that the overall tax burden on tobacco, pan masala, and other tobacco products remains the same even after the GST compensation cess is abolished.
These bills will replace the old GST compensation cess with a new one. Finance Minister Nirmala Sitharaman introduced these bills amid uproar from the opposition.
There was a huge uproar in the Lok Sabha as opposition parties demanded a discussion on the Special Revision of Electoral Rolls (SIR) and other issues. Trinamool Congress MP Saugata Roy and DMK MP Kathir Anand opposed the bills.
Saugata Roy stated that while the bills call for an excise duty on tobacco, they ignore the health risks associated with tobacco. Kathir Anand stated that this would further increase the tax burden on the public.
The Central Excise Tax Amendment Bill, 2025, would impose a new excise duty on cigarettes and other tobacco products. This duty would replace the existing GST compensation cess.
The “National Security Cess from Health Protection Bill, 2025” will replace the compensation cess on pan masala. It aims to raise additional funds for national security and public health expenses. This cess will be applicable to the machinery and processes used to manufacture pan masala and similar products.
Currently, tobacco and pan masala attract a 28% GST, and a compensation cess is also levied at varying rates.
