Context
• The Union Government introduced two Bills in Parliament:
- Health Security & National Security Cess Bill, 2025
- Central Excise (Amendment) Bill, 2025
• Aim: To raise excise duties on tobacco and impose a cess on pan masala manufacturing.
• Reason: The GST compensation cess on tobacco—used to reimburse States for GST revenue losses—is being phased out once the Centre repays loans taken during COVID-19.
• To offset this revenue gap and fund health + national security, the Centre seeks new cesses on:
• tobacco products
• and pan masala manufacturing processes.



