Bills to replace GST compensation cess on tobacco, pan masala likely in LS on Monday
New Delhi (PTI): The government is likely to introduce two bills in the Lok Sabha to replace GST compensation cess with another levy, to ensure that the tax incidence remains the same on tobacco, pan masala and other sin goods after discontinuation of the cess.
The Central Excise Amendment Bill, 2025, and The Health Security se National Security Cess Bill, 2025, are listed for introduction on Monday by Finance Minister Nirmala Sitharaman.
According to sources, the Central Excise Amendment Bill, 2025, will replace GST compensation cess on tobacco by levying excise duty on tobacco products like cigarettes.
The 'Health Security se National Security Cess Bill, 2025', will replace the compensation cess on pan masala. It seeks to "augment the resources for meeting Security expenditure on national security and for public health, and levy a cess for the said purposes on the machines installed or other processes undertaken by which specified goods are manufactured or produced".
Currently, Goods and Services Tax (GST) at 28 per cent is levied on tobacco and pan masala. On top of that, a compensation cess at varied rate is levied.
At the time of the introduction of the GST on July 1, 2017, a compensation cess mechanism was put in place for 5 years till June 30, 2022, to make up for the revenue loss suffered by states on account of GST implementation.
The levy of compensation cess was later extended by 4 years till March 31, 2026, and the collection is being used to repay the loan that the centre took to compensate states for the GST revenue loss during the Covid period.
Since that loan repayment is going to be fully repaid sometime in December, the compensation cess will cease to exist.
On September 3, 2025, the GST Council had decided to continue with the compensation cess on tobacco and pan masala till the loans taken are repaid.
On other luxury items, the compensation cess ended on September 22, when the GST rate rationalisation was implemented with just 2 slabs of 5 and 18 per cent. A 40 per cent rate was fixed for ultra-luxury goods and aerated drinks.
The Central Excise Amendment Bill, 2025, and The Health Security se National Security Cess Bill, 2025 will ensure that the tax incidence on sin goods like tobacco and pan masala remains the same after discontinuation of the compensation Cess.
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VHP warns of statewide stir in Karnataka against move to ease cattle transport law
Udupi (Karnataka) (PTI): The VHP on Saturday demanded the immediate withdrawal of a proposed amendment to the Karnataka Prevention of Slaughter and Preservation of Cattle Act, 2020, accusing the state government of weakening a law that has deterred illegal cattle transport.
The organisation's Go Raksha Wing, Karnataka South, has also announced district-level protests on December 8.
According to officials, the existing law mandates a bank guarantee for securing the release of vehicles seized for alleged illegal cattle transportation.
On December 4, the state Cabinet proposed an amendment enabling the release of such vehicles on an indemnity bond instead.
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Addressing reporters in Udupi, VHP leader and Prantha Goraksha Pramukh Sunil K R, said the government's move amounted to "sympathy for cattle lifters" and claimed that it was part of broader actions "targeting Hindus".
He argued that the law in its current form is stringent and has played a crucial role in reducing incidents of illegal cattle transport and theft.
Under the Act, vehicles involved in offences can be surrendered and, upon conviction, permanently seized by authorities. "Diluting these provisions will embolden offenders," Sunil said.
The VHP leader warned that easing the process of vehicle release would not only encourage violators but also result in rising cruelty against cattle.
Sunil further claimed that the strict enforcement of the 2020 law had brought down cases of cattle-related offences significantly. Rolling back these provisions, he said, could reverse those gains and would lead to an increase in illegal transport.
He reiterated that the government must reconsider its decision and preserve the integrity of the existing law.
