Parliament clears Cess on pan masala units
Parliament on Monday approved the Health Security and National Security Cess Bill, 2025, paving the way for a new levy on pan masala manufacturing units to strengthen funding for national security and public health.The Rajya Sabha returned the bill to the Lok Sabha, which had cleared it on Friday.
Upon whom will the cess be imposed?
The cess will be imposed over and above GST and calculated on the production capacity of machines installed in pan masala factories.Finance Minister Nirmala Sitharaman, replying to the debate, said the measure is aimed at creating a “dedicated and predictable resource stream” for two critical priorities—health and defence.
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Sitharaman clarified that GSTrevenues will remain unaffected, noting that pan masala will continue to fall under the highest GST slab of 40%. The new cess will operate independently of GST inflows, ensuring no overlap in taxation.
Growing demands of India’s defence budget
Underscoring the growing demands on India’s defence budget, the minister highlighted the rising costs of precision weaponry, cyber and space-based systems, and advanced surveillance technologies.
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With modern warfare becoming increasingly technology-driven, she said the Centre must mobilise additional resources to meet emerging security challenges.
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