LS clears pan masala cess bill

The proposed cess on pan masala is being levied with the twin objectives of strengthening national security initiatives such as the Mission Sudarshan Chakra (India’s own Iron Dome like shield), and supporting public health initiatives through the states, Union finance minister Nirmala Sitharaman said in the Lok Sabha before the House passed the bill on Friday.

- Rajeev Jayaswal

Speaking about the specific objective of collecting revenue through the cess, she said, “Part of this will be spent on public health, and the other part will go for defence-related purposes.” The minister said imposing the cess on pan masala has become necessary as total tax incidence on it will fall substantially after the Goods and Services Tax compensation cess is phased out completely, making the “highly addictive” demerit good more affordable, which is undesirable. The plan is to impose the new cess to cover the gap that will be left when the GST compensation cess ends, she said.