Union Finance Minister Nirmala Sitharaman addresses a court docket throughout the winter parliamentary session in New Delhi, December 5, 2025. Picture credit score: Sansad TV through PTI
Parliament handed a invoice on Friday (5 December 2025) that may impose a particular tax on pan masala and use the funds to enhance public well being and strengthen nationwide safety. The Well being Safety and Nationwide Safety Tax Invoice, 2025 introduces a brand new tax to switch the present compensation tax below the GST framework.
Union Finance Minister Nirmala Sitharaman mentioned, “Public well being is a nationwide problem, so the funds will likely be shared with states.”
Replying to a debate on the invoice earlier than it was handed by voice vote, Sitharaman mentioned, “Pan masala will likely be taxed at as much as 40 per cent below Items and Providers Tax (GST) primarily based on its consumption. There will likely be no impression on GST income as a result of this suspension.”
The primary goal of the newly launched Well being Safety (Nationwide Tax) Invoice, 2025 is to impose a tax on the manufacturing capability of bread masala specifically, a class which the federal government says is nearly unintroducable below the normal tax regulation, the Finance Minister mentioned on Thursday (4 December 2025).
On Friday (December 4), she mentioned the invoice is meant to reinforce monetary assets to fulfill nationwide safety and public well being spending by imposing a levy on equipment and different processes put in to supply pan masala and related merchandise.
She mentioned the invoice’s objective is to create a “devoted and predictable circulation of assets” to 2 areas of nationwide significance: well being and nationwide safety.
The proposed well being and nationwide safety tax could be greater than GST and could be levied on the manufacturing capability of equipment in pan masala manufacturing factories. Initially, the invoice will apply to pan masala. Nevertheless, if essential, the federal government can notify to increase the suspension to different merchandise as properly.
Sitharaman added that the share of cess in whole income was 6.1 per cent within the present monetary 12 months, decrease than 7 per cent in 2010-14.
