The Union Government today on December 01, 2025, introduced “The Health Security se National Security Cess Bill, 2025” in the Lok Sabha with the objective of augmenting financial resources for national security and public health expenditure. The Bill proposes the levy of a cess on machines and processes used for the manufacture or production of specified goods, particularly including pan masala and similar products, in order to generate additional revenue for priority sectors of national interest.
Key Features of the Bill
- Imposition of Cess: A cess titled “Health Security se National Security Cess” shall be levied and collected from every taxable person operating machines or processes that manufacture specified goods. The cess is in addition to existing duties and taxes and shall be computed based on machine speed, capacity, and packing weight.
- Purpose of Revenue Utilization: The proceeds from the cess shall be credited to the Consolidated Fund of India and, upon due appropriation by Parliament, shall be used exclusively for expenditure on national security and public health, including associated schemes and programmes.
- Mandatory Registration and Returns: All taxable persons operating relevant machines or processes will be required to register with the designated officer and file monthly returns of cess self-assessment. Collection of cess must be completed no later than the 7th day of each month.
- Robust Oversight and Monitoring: The Bill provides for scrutiny, audit, inspection, search, and seizure to ensure compliance and safeguard government revenue. Taxable persons must cooperate with prescribed oversight and verification mechanisms to ensure transparency.
- Penalty and Prosecution Provisions: Stringent penalties and prosecution have been proposed for non-registration, non-payment of cess, fraudulent refunds, destruction of evidence, and evasion-related activities. Offences involving fraud or wilful misstatement may attract imprisonment up to five years depending on the severity of evasion.
- Appeals and Legal Remedies: A structured three-tier grievance redressal framework has been introduced—Appellate Authority, Appellate Tribunal, and Courts—allowing taxpayers to challenge orders through due process.
Expected Impact
The Bill is expected to substantially boost fiscal capacity for national security preparedness and healthcare infrastructure, reducing the strain on the general tax pool. The cess framework also promotes better compliance in sectors historically associated with high revenue leakage, thereby improving integrity in manufacturing and taxation systems.
Next Steps
Following introduction in the Lok Sabha, the Bill will be taken up for discussion and passage, after which the Government will notify the date of enforcement through the Official Gazette.
The Bill can be accessed at: https://a2ztaxcorp.net/wp-content/uploads/2025/12/THE-HEALTH-SECURITY-SE-NATIONAL-SECURITY-CESS-BILL-2025.pdf
