Lok Sabha passes bill to curb tax evasion in pan masala
The Lok Sabha just cleared a new bill to tackle tax evasion in the pan masala industry.
The plan? Switch to capacity-based taxes so companies can't dodge taxes by tweaking their products.
Finance Minister Nirmala Sitharaman pointed out this move will make it easier to bring similar products under the same rules, without endless parliamentary debates.
What changes for tobacco and where does the money go?
Pan masala will still face a heavy tax—just restructured.
GST goes up from 28% to 40%, but the overall tax burden stays about the same, with new health and national security cesses replacing older ones.
The extra money collected will go toward public health projects and strengthening national defense, which Sitharaman emphasized as necessary for addressing the capital-intensive nature of modern warfare and technology.