New Tax Regime: Sin Goods Under Scrutiny

Finance Minister Nirmala Sitharaman introduces two bills in Lok Sabha to alter levies on sin goods like tobacco and pan masala. The bills aim to maintain funding for public health and national security, while replacing the GST compensation cess on these items with new excise duties and cesses.

Finance Minister Nirmala Sitharaman has tabled two significant bills in the Lok Sabha aimed at restructuring levies on so-called 'sin goods' such as tobacco and pan masala. This move comes as the government prepares to phase out the GST compensation cess imposed on these items.

The Central Excise (Amendment) Bill includes a provision for levying a new excise duty on various tobacco products including cigarettes, cigars, and hookahs. At the same time, the Health Security se National Security Cess Bill, 2025, proposes a cess on the manufacturing of pan masala and other notified goods to fund sector-relevant initiatives.

As opposition parties demanded a discussion on a revision of electoral rolls, TMC's Saugata Ray challenged these legislative proposals, citing non-inclusion of health implications and issues surrounding state funding. Despite these disputes, the government remains resolute in developing fiscal strategies to support public health and national security funding.

(With inputs from agencies.)