### India Implements Central Excise Amendment Bill 2025 to Raise Tobacco Duties and Fund Health Initiatives The Indian Parliament has recently passed the Central Excise Amendment Bill 2025, which significantly increases duties on tobacco products, including cigarettes and pan masala. This legislative move comes in the wake of the expiration of the Goods and Services Tax (GST) compensation cess, aiming to maintain tax levels on these products while also generating funds for health and national security initiatives. The Finance Minister, Nirmala Sitharaman, emphasized that the new excise duties would align with World Health Organization (WHO) recommendations, raising the cigarette tax from 53% to nearly 75% to curb tobacco consumption and enhance public health funding [https://www.republicworld.com/business/parliament-approves-excise-bill-2025-sitharaman-confirms-higher-cigarette-duties-shared-with-states-boosts-tobacco-tax-to-who-levels]. ### Structure of the Legislative Changes and Their Implications 1. **Introduction of New Excise Duties**: The Central Excise Amendment Bill 2025 replaces the GST compensation cess with higher excise duties on tobacco products, ensuring that the overall tax burden remains unchanged [https://www.newindianexpress.com/business/2025/Dec/02/new-cess-tobacco-pan-masala-makers-face-more-compliances]. 2. **Revenue Sharing with States**: Finance Minister Sitharaman confirmed that the increased revenue from tobacco duties would be shared with state governments, as per the Finance Commission's recommendations, ensuring that local economies benefit from the tax hikes [https://www.republicworld.com/business/parliament-approves-excise-bill-2025-sitharaman-confirms-higher-cigarette-duties-shared-with-states-boosts-tobacco-tax-to-who-levels]. 3. **Support for Affected Workers**: The government has assured that the new tax structure will not adversely affect tobacco farmers or the 49.82 lakh beedi workers, with plans for diversification schemes to support these communities [https://www.republicworld.com/business/parliament-approves-excise-bill-2025-sitharaman-confirms-higher-cigarette-duties-shared-with-states-boosts-tobacco-tax-to-who-levels]. 4. **Health and Security Funding**: The revenue generated from the new excise duties and the proposed Health Security and National Security Cess will be directed towards funding health initiatives and national security measures, addressing public health concerns related to tobacco use [https://www.republicworld.com/business/finance-minister-nirmala-sitharaman-introduces-tobacco-cess-bills-in-lok-sabha-to-boost-national-security-and-health-funding]. ### Supporting Evidence and Data - **Tax Increase**: The excise duty on cigarettes is set to rise from 53% to approximately 75%, aligning with WHO recommendations to reduce tobacco affordability [https://www.republicworld.com/business/parliament-approves-excise-bill-2025-sitharaman-confirms-higher-cigarette-duties-shared-with-states-boosts-tobacco-tax-to-who-levels]. - **Revenue Sharing**: The Finance Minister has committed to sharing the increased revenue with states, which is expected to bolster local economies [https://www.republicworld.com/business/parliament-approves-excise-bill-2025-sitharaman-confirms-higher-cigarette-duties-shared-with-states-boosts-tobacco-tax-to-who-levels]. - **Support for Workers**: The government has outlined plans to protect the livelihoods of beedi workers and farmers through diversification initiatives [https://www.republicworld.com/business/parliament-approves-excise-bill-2025-sitharaman-confirms-higher-cigarette-duties-shared-with-states-boosts-tobacco-tax-to-who-levels]. ### Conclusion: Legislative Impact and Future Directions The passage of the Central Excise Amendment Bill 2025 marks a significant shift in India's approach to tobacco taxation, with the following key points: 1. **Increased Tobacco Duties**: The new excise duties are designed to discourage tobacco use and align with global health standards. 2. **Revenue Sharing**: The commitment to share revenue with states aims to support local economies and public health initiatives. 3. **Support for Affected Communities**: The government’s focus on protecting the livelihoods of tobacco workers indicates a balanced approach to health and economic concerns. In summary, the legislative changes reflect a comprehensive strategy to enhance public health funding while maintaining economic stability for those involved in the tobacco industry [https://www.republicworld.com/business/parliament-approves-excise-bill-2025-sitharaman-confirms-higher-cigarette-duties-shared-with-states-boosts-tobacco-tax-to-who-levels].