Health Security se National Security Cess: A Fiscal Tool for Public Welfare
CONTEXT
The Bill creates a legal framework for levying a special excise cess on the manufacturing of pan masala and other tobacco products.
NEED FOR THE BILL
India has 42 percent men and 14 percent women using tobacco according to GATS-2. The country accounts for 70 percent of global smokeless tobacco users, with gutkha and pan masala widely consumed. Tobacco-related cancers make India rank first globally in male cancer deaths. The economic burden of tobacco use reached ₹1.77 lakh crore in 2016-17. Existing bans, especially on gutkha, have been ineffective due to marketing networks and industry influence. WHO recommends 75 percent MRP taxation, yet affordability remains high. Around 87 percent of vendors sell single cigarette sticks, a practice banned in 88 countries.
THEME-BASED PROVISIONS
Goods Covered include pan masala and any additionally notified goods.
Taxable Person includes anyone owning, operating or controlling machines used for manufacturing specified products.
Nature of Levy is based on installed machines or manual processes, over and above existing duties.
Basis of Calculation depends on machine speed and pack weight or a flat rate for manual operations.
Monthly Cess Rates include ₹101 lakh for machine-based units and ₹11 lakh for manual units.
Abatement is available for 15 days or more of continuous non-operation.
Use of Proceeds channels funds to the Consolidated Fund of India for public health and national security.
Compliance Requirements include registration, machine declaration and monthly returns by the 7th.
Monitoring Measures include scrutiny, audit, inspection, search and seizure.
Appeals Process spans Appellate Authority, Tribunal, High Court and Supreme Court.
Government Powers include doubling the cess, providing exemptions and adding goods to the Schedule.
PROCEDURAL REQUIREMENTS
Registration is mandatory for all persons operating machines or processes.
Self-Declaration includes details of machinery, process parameters, rated speed and pack weight.
Verification may be carried out by officers with calibration checks.
Cess Computation uses machine capacity or manual flat rate.
Monthly Payment must be completed before the 7th with return filing.
Abatement applies for 15-plus days of stoppage.
Review and Audit include scrutiny and assessment for unpaid or short-paid cess.
Enforcement covers inspection, search, seizure, confiscation, recovery and graded penalties.
Appeal Structure ensures transparent dispute resolution at multiple levels.
WAY FORWARD
The Bill strengthens health and security financing through a stable capacity-based cess structure. Its strong compliance and enforcement mechanisms improve transparency and reduce evasion. The framework aligns fiscal action with national public health priorities and administrative efficiency.
Source : PIB