Parliament Passes Central Excise (Amendment) Bill, 2025

On 4th December 2025, the Parliament passed the Central Excise (Amendment) Bill, 2025, with the Rajya Sabha approving and returning it to the Lok Sabha.

The legislation amends the Central Excise Act, 1944 to raise excise duties and cess on various tobacco products, creating fiscal space to protect tax incidence after the cessation of existing cess provisions.

Key Points

Aim of the Amendment: The Bill seeks to increase central excise duty on unmanufactured tobacco, manufactured tobacco, tobacco products, and tobacco substitutes to discourage tobacco consumption and safeguard public health.
Revised Duty Structure: Current duties range from ₹200 to ₹735 per thousand cigarettes; under the amended rates, duties will increase to between ₹2,700 and ₹11,000 per thousand cigarettes.
Higher Duties on Other Tobacco Products:
- Chewing tobacco: increased from 25% to 100%
- Hookah tobacco: increased from 25% to 40%
- Smoking mixtures for pipes and cigarettes: increased from 60% to 325%
Rationale: The government stated that the move aligns India’s tax incidence closer to the World Health Organization’s benchmark of 75% to reduce affordability and address public health concerns.
Farmers’ Welfare Measures: Over 1.12 lakh acres of tobacco cultivation land shifted to other crops between 2017–18 and 2021–22 under diversification programs.