Ban gutkha and paan masala manufacturers, government to introduce new cess bill in Parliament

The central government is preparing to take the biggest action so far against the gutkha and pan masala industry. Following complaints of increasing use of these products, health risks, and tax evasion, a plan has been made to impose a new tax called the "National Security and Public Health Cess." This cess will keep strict control over manufacturers and also raise additional resources for health and safety campaigns.​

In the winter session of Parliament, Finance Minister Nirmala Sitharaman will present the "Health Security and National Security Cess Bill 2025" in the Lok Sabha. According to this bill, the cess will be levied on the maximum production capacity of the machines, not on the quantity produced. Even handmade products will have to pay a fixed amount every month, while units closed for more than 15 days will get an exemption.​

Violation of rules can lead to imprisonment for up to five years and a fine. However, the facility for appeal will be available. The government will have the authority to double the cess rate. This will increase the financial burden on the industry. There is a possibility of small units shutting down, and a revolutionary step will be taken in tobacco control. Let’s learn about the key points.

1. Finance Minister Nirmala Sitharaman will present this bill in the Lok Sabha. The bill aims to raise additional funds for national security and health schemes.

2. The new cess will be levied on machines used to make gutkha and pan masala, as well as on the production process. This means that the tax will be based on production capacity, not on the quantity of finished products.

3. All manufacturers, whether goods are made by machine or by hand, will have to pay a monthly cess. Manual producers will also be subject to a fixed monthly fee.

4. After approval by Parliament, the funds collected through this cess will be spent on national security and public health projects. If necessary, the government can also double this cess.

5. Non-compliance with the rules can result in imprisonment for up to five years. However, companies can appeal to appellate authorities, including the Supreme Court.

6. Every gutkha and pan masala manufacturer must obtain mandatory registration. Without it, production will be considered illegal.

7. Companies subject to this cess will have to file monthly returns. Government officials will be able to conduct inspections and audits.

8. If a machine or production process remains shut for more than 15 days, the cess for that period may be waived.

9. This bill is being seen as the government's biggest step towards tightening restrictions on the tobacco and pan masala industry and increasing government revenue.