India’s government introduced two new tax bills today (December 1) aiming to maintain high levies on tobacco and other “sin goods” after the Goods and Services Tax (GST) compensation cess expires next year. The Central Excise (Amendment) Bill 2025, proposes excise duties of 60–70% on such products, with cigarette taxes calculated by length and filter type. Finance Minister Nirmala Sitharaman said the GST compensation cess on tobacco will end once all related loan and interest obligations are cleared. A second bill would impose a fixed monthly levy on pan masala and other notified goods.
The revenue is expected to fund health programs and national security while keeping high-risk products expensive to discourage consumption and reduce under-reporting. Both bills require manufacturer registration, including for small-scale and handmade producers.
The legislation is part of a broader tax realignment and will next go to parliamentary panels for review before a likely vote in 2026.