Central Excise (Amendment) Bill passed to repurpose levies on 'sin goods'

Key facts

• The Lok Sabha passed the Central Excise (Amendment) Bill in the Lok Sabha that look to repurpose levies on 'sin goods' such as tobacco, pan masala and related products ahead of the scheduled phaseout of the GST compensation cess levied on them.
• The Central Excise (Amendment) Bill seeks to levy excise duty on tobacco and related products, replacing the existing compensation cess.
• The revenues from levy of excise on tobacco would be part of the divisible pool of tax revenues.
• 'The Health Security se National Security Cess Bill, 2025' would be applicable on manufacturing of pan masala and other goods that the government may notify.
• The collection from the health and national security cess would go towards funding public health initiatives and national security while maintaining high taxation on 'sin goods'.
• The Central Excise (Amendment) Bill seeks to levy excise duty on cigars / cheroots / cigarettes in the range of Rs 5,000-11,000 per 1,000 sticks depending on the length.
• It also proposes levy of 60-70 per cent on unmanufactured tobacco and 100 per cent on nicotine and inhalation products, over and above the 40 per cent GST rate that would be applicable on sin goods.