The Rajya Sabha has taken up the Central Excise (Amendment) Bill, 2025 for consideration and return. The proposed law aimed to amend the Central Excise Act, 1944, specifically to raise excise duties and cess on tobacco products such as cigarettes, cigars, hookah tobacco, chewing tobacco, zarda and scented tobacco. The amendment is required to give the government the fiscal space to increase the rate of central excise duty on tobacco and tobacco products so as to protect tax incidence, after the cess ends. Minister of State for Finance Pankaj Chaudhary moved the bill.
The Bill is intended to increase central excise duty on unmanufactured tobacco, manufactured tobacco, tobacco products, and tobacco substitutes. While the Central Excise Act, 1944 levies an excise duty ranging between 200 rupees and 735 rupees per thousand cigarettes, the enhanced duty under the Bill ranges between two thousand 700 rupees and 11 thousand rupees per thousand cigarettes. The Bill also prescribes higher excise duties for manufactured tobacco products. For instance, the duty on chewing tobacco will increase from 25 percent to 100 percent. Duty on hookah will increase from 25 percent to 40 percent. For smoking mixtures for pipes and cigarettes, the duty is proposed to be increased from 60 percent to 325 percent. The purpose of the bill is to protect people from the ill effects of tobacco and to discourage them from its consumption.
Participating in the discussion, Pramod Tiwari of Congress expressed concern that the Bill will harm tobacco farmers. He said the Bill should be sent to a parliamentary committee. TMC’s Sagarika Ghose opposed the Bill, claiming that raising taxes will not discourage people from consuming tobacco products. She said the government is not taking any steps to control pan masala ads by celebrities. She called for strong public health intervention to address tobacco consumption. AAP MP Sandeep Kumar Pathak said that excessive taxation is not a solution to curbing tobacco use. M Thambidurai of AIADMK said this Bill is a timely and necessary reform aimed at safeguarding the public health and maintaining revenue stability.
