New Delhi, Nov 30:
As the Winter Session of Parliament begins on Monday, the Government is set to introduce 13 new bills, including The Central Excise Amendment Bill, 2025 and The Health Security National Security Cess Bill, 2025. Finance Minister Nirmala Sitharaman will table both bills in the Lok Sabha, marking a major step toward restructuring the taxation framework on sin goods such as tobacco and pan masala.
According to sources, the new legislation aims to replace the existing GST compensation cess with an excise levy to ensure that the current high tax burden on these products is maintained. The shift becomes necessary as the Centre prepares to phase out the compensation cess, originally imposed to make up for GST revenue losses incurred by states during the Covid-19 period.
Under current rules, a 28 per cent GST is levied on tobacco and pan masala, along with an additional compensation cess. This cess, extended until March 31, 2026, has been primarily used to repay loans that the Centre had taken to compensate states. However, with the loan repayment expected to be completed by December, the compensation cess must be withdrawn.
The Health Security National Security Cess Bill, 2025 proposes to introduce a fresh cess on the machines or processes involved in manufacturing specified products like pan masala. The objective is to generate additional resources for national security expenditure and public health initiatives.
The GST Council had earlier decided on September 3, 2025, to continue the cess on tobacco and pan masala until loan repayments are fully cleared. Meanwhile, compensation cess on luxury items ended on September 22, following GST rate rationalisation that reduced slabs to 5 per cent and 18 per cent, with a 40 per cent rate for luxury goods and sugary beverages.
Other important bills scheduled for introduction this session include the National Highways (Amendment) Bill, Atomic Energy Bill, Corporate Laws (Amendment) Bill, Insurance Laws (Amendment) Bill, and the Higher Education Commission of India Bill, 2025.
