The Parliament has passed the Health Security se National Security Cess Bill, 2025, with the Rajya Sabha approving and returning the legislation to the Lok Sabha after discussion. The Bill proposes to levy a cess on the production of goods such as pan masala and any other goods that may be notified by the central government. Proceeds from the cess will be used for expenditure towards public health and national security.
Replying to the debate on the Bill in the Upper House, Finance Minister Nirmala Sitharaman said the cess offers a feasible mechanism to strengthen citizens’ health and the country’s military preparedness. She said, the cess will be levied only on demerit goods, not on any essential items. The Minister said, raising a dedicated stream of revenue for credible defence capabilities is very important in this era, as the security apparatus is changing rapidly. She said, modern conflicts are dominated by precision weapons, autonomous systems and space assets. Ms Sitharaman said, all these require capital-intensive, continuous and steady expenditure. She said, the government acknowledges that health is a state subject, which is why the revenue collected from cess is being shared with the states.
The Minister said, under the earlier GST regime, sin goods or demerit goods attracted GST along with a compensation cess, pushing the total incidence as high as 88 per cent in some cases and always above 40 per cent. She said, with the advent of next-generation GST, the compensation cess has been phased out, and GST alone now provides a cap of 40 per cent.
Participating in the debate, Shaktisinh Gohil of Congress said harmful goods like gutkha and pan masala must be banned. He added that mere cess will not help address this health concern. TMC’s Saket Gokhale remarked that the power of taxation is purely the domain of Parliament. He criticised the Bill by claiming that the Bill is against federalism. Milind Murli Deora of Shiv Sena supported the Bill, saying there are many disadvantages of consuming harmful tobacco goods like pan masala. He also highlighted the growing trend of consumption of alcohol, which is equally carcinogenic.
Kavita Patidar of the BJP said that every year, nearly 13.5 lakh people die due to tobacco-related diseases and cancer, and it puts the financial burden on the government. She expressed hope that the bill will act as a deterrent to those who consume tobacco. She said, the revenue collected by levying this cess will be spent on healthcare. Supporting the Bill, TDP MP Masthan Rao Yadav Beedha highlighted how the cess collected under the legislation will be used to prevent life-threatening diseases, especially in young people. Sulata Deo of BJD, Dr M Thambidurai of AIADMK, Dr John Brittas of CPI(M), among others, also participated in the debate. After the discussion, the House took up the Special Mention, wherein the MPs raised the matter of public importance. Later, the House was adjourned for the day.
