|
Feature
|
Health Security se National Security Cess
|
Central Excise (Amendment) Bill
|
GST Compensation Cess
|
|
Nature of Levy
|
New cess on specified sin goods |
Permanent central excise duty on tobacco |
Additional cess under the GST Act, 2017 |
|
Purpose
|
Mobilise funds for health + national security |
Maintain a high tax burden on tobacco after the cess ends |
Compensate states for GST revenue loss |
|
Tax Base
|
Production capacity of machines |
Specific excise duty on tobacco items |
Applied on the consumption of luxury/demerit goods |
|
Covered Goods
|
Initially pan masala, expandable to others |
Cigarettes, cigars, cheroots, chewing/ hookah/ scented tobacco, zarda |
Luxury cars, aerated drinks, tobacco, coal |
|
Revenue Destination
|
Consolidated Fund of India (no state share) |
Consolidated Fund of India |
Compensation Fund for states |
|
Timeframe
|
New, permanent policy measure |
Permanent duty structure |
July 2017-June 2022; extended to March 2026 |
|
State Involvement
|
No revenue sharing |
No GST Council approval needed for rate changes |
Directly compensates states for revenue loss |
|
Policy Goal
|
Maintain tax neutrality + fund health/security |
Preserve tobacco tax levels post-GST cess |
Guarantee 14% annual revenue growth to states |