Parliament Winter Session: Govt to bring two bills in Lok Sabha to replace GST cess on tobacco, pan masala with new levies

The government will introduce two bills in the Lok Sabha on Monday (December 1, 2025) to levy excise duty on tobacco and tobacco products, and a new cess on manufacturing of pan masala.

The Central Excise Amendment Bill, 2025, will replace the GST compensation Cess, which is currently levied on all tobacco products like cigarette, chewing tobacco, cigars, hookahs, zarda, and scented tobacco.

Also read | From tea stalls to tumours, tobacco affordability fuelling cancer epidemic in India

The Central Excise (Amendment) Bill, 2025, seeks "to give the government the fiscal space to increase the rate of central excise duty on tobacco and tobacco products so as to protect tax incidence," once the GST compensation Cess ends, according to the statement of objects and reasons of the Bill.

The Health Security se National Security Cess Bill, 2025, seeks to levy Cess on the production of specified goods like pan masala.