Centre tables bill for cess on pan masala, gutka for security & health
Finance Minister Nirmala Sitharaman has introduced the Health Security se National Security Cess Bill, 2025 in the Lok Sabha. The proposed legislation targets manufacturers of pan masala and gutkha with a new tax system tied to production machinery.
The Bill imposes a cess on machines used in the production of pan masala and gutkha. Instead of taxing the actual output, the levy is based on the production capacity of the equipment. Taxable individuals include anyone who owns, operates, or controls these machines.
Manufacturers must register under the new system and file monthly returns. Strict audit procedures will monitor compliance, with penalties—including imprisonment—for evasion, fraud, or false record-keeping. The government can also double the cess in special circumstances. Funds raised will support national security and public health initiatives, subject to Parliamentary approval. The Bill also grants officers powers to search, seize goods, and arrest non-compliant parties.
The proposed cess marks a shift in how pan masala and gutkha producers are taxed. If passed, it will introduce stricter oversight and financial contributions toward security and health programmes. The legislation now awaits further debate in Parliament.
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