Lok Sabha puts extra tax on pan masala makers to fund health and security

Business Dec 05, 2025

Parliament just passed a new bill adding a special cess (kind of like an extra tax) on companies that make pan masala. This is on top of the 40% GST they already pay.
The goal? To raise more money for national security and public health projects, according to Finance Minister Nirmala Sitharaman.

How it works—and why it matters

The new cess is based on how much pan masala a company can produce with its machines, not just how much they sell.
Companies now have to register, file monthly returns, and get audited regularly.
If they don't follow the rules, there could be serious fines or even jail time.
The government expects this move will help tackle health issues linked to products like pan masala while bringing in funds for important causes.