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 killed, three injured as car crashes into bridge in UP’s Balrampur
Balrampur (UP) (PTI): Three people died and as many were injured after their car crashed into a bridge on the Balrampur-Badhni national highway here early Sunday, police said.
The accident occurred near Purushottam village on the Tulsipur-Pachpedwa stretch when the car, carrying six people, crashed into the bridge, they said.
According to police, Adil (21) and Afroz (20), residents of Pachpedwa, died on the spot.
The injured, including Hashmi (21), were rushed to the district hospital, where Hashmi died.
The victims had gone to attend the Devi Patan Mela in Tulsipur on Saturday night and were returning home when the accident took place, the police added.
Tulsipur Circle Officer Jitendra Kumar said the bodies have been sent for post-mortem and further legal proceedings are underway.
Meanwhile, local SP MLA Rakesh Yadav visited the bereaved families and assured all possible assistance. He also demanded Rs 10 lakh ex gratia for each of the deceased, stating that all the victims belonged to economically weaker families.
