Health Security se National Security Cess Bill, 2025
Why in news?
The Health Security se National Security Cess Bill, 2025, introduced in Lok Sabha on December 1, 2025, levies a cess on production of demerit goods like pan masala to fund public health and national security expenditures.
Key provisions of the bill
- Levy of Cess: Imposes a cess on owners of machines or manufacturing processes producing specified demerit goods like pan masala, tobacco, and aerated drinks, replacing the GST compensation cess on these items.
- Cess Calculation: Monthly basis per machine, varying by pouch weight and speed—e.g., Rs 1.01 crore for ≤500 pouches/min (≤2.5g), Rs 25.47 crore for >2,000 pouches/min (>10g); manual factories pay Rs 11 lakh annually.
- Self-Assessment and Returns: Producers file monthly returns by the 20th, self-assess and pay cess; annual returns due by December 31.
- Audits and Adjustments: Commissioner can audit within 3 years (5 for fraud); demands recovery with 18% interest; government may enhance rates up to double for public interest.
- Inspections and Powers: Officers (Joint Commissioner+) can enter premises, inspect, search, seize on evasion suspicion; mandatory records maintained for 5 years.
- Penalties and Offences: Rs 10,000 or evaded amount (higher) for non-payment/false returns; Rs 1 lakh for abetment; 1-5 years jail + fine for fraud >Rs 1 crore.
- Appeals Mechanism: Three-tier: Appellate authority (within 3 months), GST Appellate Tribunal, High Court (substantial question of law).
- Fund Utilization: Proceeds to Health Security and National Security Fund for public health (e.g., disease control) and security expenditures; states share for health schemes.
Debate Highlights
Opposition raised concerns over the bilingual title, lack of explicit state-sharing in the text, fiscal federalism issues, and potential "inspector raj" impacting MSMEs, urging Select Committee referral.
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