Parliament Approves New Cess for National Security and Public Health

The Indian Parliament approved the Health Security and National Security Cess Bill, 2025, imposing a cess on pan masala manufacturing to fund national defense and public health. The cess, in addition to GST, is aimed at bolstering defense capabilities and health security, addressing past funding gaps in defense.

In a significant move, the Indian Parliament on Monday approved the Health Security and National Security Cess Bill, 2025, which aims to impose a new cess on pan masala manufacturing units. This levy is intended to generate additional revenue for national defense and public health initiatives.

Finance Minister Nirmala Sitharaman emphasized the importance of fortifying the country's defense capabilities in the face of modern technological warfare. Addressing Parliament, she highlighted the necessity of a dedicated revenue stream for defense, citing historical funding shortages and the strategic importance of staying technologically advanced.

The cess, which will be levied in addition to the GST, will impact pan masala production specifically, categorizing it as a demerit good. Funds raised will not only address national security needs but also enhance public health infrastructure, marking a focused attempt to tackle two critical areas simultaneously.

(With inputs from agencies.)