Union Finance Minister Nirmala Sitharaman speaks in the Rajya Sabha during the winter session of Parliament in Delhi, Monday, December 8, 2025. | Photo credit: PTI
The Rajya Sabha on Monday (December 8, 2025) passed the National Security Cess Bill, 2025 after a debate where opposition members alleged that the bill was an encroachment on states’ rights. In her reply to the debate, Finance Minister Nirmala Sitharaman said that the percentage of gross tax revenue during the erstwhile UPA regime was 7% and it was 6.1% in 2025-26.
“Now a much lower amount is collected than what was collected under the UPA,” she said in response to allegations that the revenue collected by the Center was not shared with the states. The minister added that the new cess, as proposed in the bill, is meant to serve national and health security costs.
The bill seeks to levy a levy on manufacturing units of the pan masala tobacco product, which will be used to boost spending on national security and public health. During the debate, the opposition asked the government to clarify how the allocation to states and union territories will be done from the end as health is a state concern.
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YSRCP member Golla Baburao said since the fees and surcharges were not shared with the states, the Center should clarify whether the National Health Security Cess revenue will be shared with the states as health is a state matter and it is the primary responsibility of the states to implement health related schemes and programmes. “After all, she (Ms Sitharaman) did not mention how the essence is used for public health,” Mr Baburao said.
AAP member Ashok Kumar Mittal said the share of cess in central government revenue collection has increased. “It is causing so much loss to the states. The Comptroller and Auditor General’s report dated August 25 says that the central government has failed to transfer waste collection worth ₹3.69 crore to the intended reserve,” he said, adding that Section 21 of the Act provides that any court will take cognizance of an offense only when the commissioner of the department allows it. “That is the case of Inspector Raj. If an official commits a mistake, a common citizen cannot even go to court. This is against justice,” Mr. Mittal said.
Trinamool Congress member Saket Gokhale and CPI(M) member John Brittas also expressed similar concerns. “The power to tax is purely, exclusively the domain of Parliament. Through this Act, the Union Government is giving itself the power to double the tax rate without putting it before the Parliamentary Board. This is an absolute mockery of Parliament,” Mr Gokhale said. DMK Kanimozhi member NVN Somu said that Tamil Nadu will never allow state rights, revenue or autonomy to slowly erode under the guise of reforms.
Published – 08 Dec 2025 19:33 IST
