FM Sitharaman Clarifies Cess On Demerit Goods: Fungible Funds For Defence, Public Health Support

Finance Minister Nirmala Sitharaman addressed the Parliament on the Health Security se National Security Cess Bill, 2025, clarifying that the levy is meant for demerit goods only. She emphasized that while the money collected is fungible and can be used for defence, road building, or other priorities, there is no intent to interfere with the GST Council’s domain. The FM highlighted that a portion of the cess collections, which will be levied to support public health initiatives, will be shared with the states. Sitharaman reiterated that the measure aims to strengthen health and national security funding without impacting GST structures.