Union Finance Minister Nirmala Sitharaman on Thursday informed the Lok Sabha that the proposed Health and National Security Cess will not be levied on essential commodities but would be imposed on the production capacity of pan masala units, which is a demerit good.

Moving the Health Security se National Security Cess Bill, 2025, for discussion in the lower House, Sitharaman also said the proceeds from the cess will be shared with states under specific health schemes.

"This is a cess, and it is placed not on any essential commodity. The purpose of this Bill is to levy a cess on demerit goods, which are associated with significant health risks. We wish to impose such a cost, so that it is a deterrent, so people tend not to use it," Sitharaman said.

"Part of the revenue from this cess wil

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