New Tax on Pan Masala, Gutka to Boost Health & Defense

• Health and National Security Cess Bill-2025 approved, imposing additional tax on pan masala, gutka, and tobacco products.
• Funds from the new cess will be used for national security, modern defense technology, and treating fatal diseases like cancer.
• Union Finance Minister Nirmala Sitharaman clarified the tax targets only products harmful to health, not essential items.
• The new cess, combined with a 40% maximum GST, will significantly increase the tax burden on manufacturers of these products.
• A portion of the collected cess will also be shared with states to support their initiatives.

Why It Matters: New tax on harmful products funds national security and health.