'New tax on tobacco to be shared with states'

Central Excise (Amendment) Bill passed in LS amid oppn concerns; FM tells states rates on bidis haven't changed

- PUSHPITA DEY @ New Delhi

THE revenue from the excise duty proposed on tobacco products - replacing the Compensation Cess - will be part of the divisible pool of the Centre's taxes, and states will receive their share, Finance Minister Nirmala Sitharaman said on Wednesday while responding to the debate on the Central Excise (Amendment) Bill, 2025 in the Lok Sabha.

She also assured states that the rates on bidis have been kept unchanged to ensure there is no adverse impact on the livelihood of bidi workers. The Bill was passed by the Lok Sabha on Wednesday.

"This excise is not a cess — it is a duty that goes into the divisible pool. This collection will go into the divisible pool and 41% will reach the states," Sitharaman said.