New Delhi, Nov 30: The government has listed The Central Excise Amendment Bill, 2025, and The Health Security National Security Cess Bill, 2025, among 13 legislative proposals for introduction in Parliament's Winter Session starting Monday, aiming to impose an additional levy on tobacco and pan masala products to replace the existing GST compensation cess.

Finance Minister Nirmala Sitharaman will introduce these two bills in the Lok Sabha to replace GST compensation cess with an excise levy to ensure that the high tax on sin goods such as tobacco and pan masala is maintained at current levels, sources confirmed. Besides, discussion and voting on the first batch of Supplementary Demands for Grants for the year 2025-26 will also be taken up during the session.

The Health Security 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.

The levy of compensation cess was 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.

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. Since that loan repayment is going to be fully repaid in December, the compensation cess will have to be phased out.

The compensation cess on other luxury items, 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 luxury goods and sugary drinks such as Pepsi and Coke.

Also Read: RBI Likely to Hold Repo Rate Steady Amid Strong GDP Growth: SBI Report

The other bills that will be introduced in Parliament in the current session include – the National Highways (Amendment) Bill, the Atomic Energy Bill, the Corporate laws (Amendment) Bill, the Insurance Laws (Amendment) Bill and the Higher Education Commission of India Bill -2025.

(IANS)