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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Three militants arrested in Manipur for threatening Sangai festival participants
Three militants arrested in Manipur for threatening Sangai festival participants
Imphal (PTI): Three militants of a banned organisation in Manipur were arrested from two districts for allegedly issuing threats to participants of the recently concluded Sangai festival, a senior officer said on Friday.
Five cases were registered in connection with the alleged threats by the proscribed G-5 to those who had attended the Sangai festival, a tourism event, he said.
"Three cadres of G-5 have been arrested from Imphal West and Imphal East districts. Investigations are underway to identify several others and take necessary legal action against those who were involved in issuing threats," the officer said.
The G-5 comprises five proscribed organisations - UNLF, KCP, KYKL, Prepak, and Prepak (Pro) - which "imposed a one-year ban on performance by four drama troupes for participating in the Sangai festival", he said.
The group also asked all stall owners and those who took part in the festival to issue a public apology before December 10, the officer said.
The Manipur Police "assured that strict action will be taken against any attempt to intimidate or disrupt cultural activities and public events in the state".
Governor Ajay Kumar Bhalla had said the Sangai festival served as an important outreach platform, bringing together tourism stakeholders from across the country and abroad.
However, the tourism festival, which was held after a three-year gap due to the ethnic conflict, recorded an abysmally low turnout, amid protests by internally displaced persons (IDPs).
More than 260 people have been killed and thousands rendered homeless in ethnic violence between Imphal Valley-based Meiteis and adjoining hills-based Kukis since May 2023.
