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The Health Security Se National Security Cess Act, 2025 received the assent of the President of India on December 15, 2025, marking its formal enactment into law in the Seventy-sixth Year of the Republic of India.

The Act has been introduced to provide a financial framework that is able to meet the costs of national security and public health by taking a specific cess from selected manufacturing practices.

The Act aims to increase the government's financial resources through the application of a Health Security Se National Security Cess on machines or processes used in the manufacture or production of certain specified goods.

The legislative intent is in accordance with the constitutional duty of the State to guarantee national security and promote public health, while also making the intensive manufacturing sectors share a proportional part of the national objectives.

"The Act may be called the Health Security Se National Security Cess Act, 2025. It shall come into force on such date as the Central Government may notify in the Official Gazette," the notification read.

The Act provides an extensive set of definitions that will facilitate its proper enforcement. Besides, it stipulates the meaning of important words such as cess, factory, machine, manufacture, process, specified goods, and taxable person.

The term manufacture is particularly interpreted in a wide sense; it encompasses not only production but also packing, repacking, labelling, relabelling, and changing the retail sale price, even if such activities do not constitute the only manufacturing process.

The Act specifically identifies pan masala and other notified goods as specified goods, with power vested in the Central Government to notify additional goods as necessary.

The Act states that any person who owns, possesses, operates, manages, or otherwise controls a machine or undertakes a manufacturing or production process of specified goods is deemed to be a taxable person.

This liability is applicable regardless of the actual output or the existence of concessional or composition schemes under other tax regulations.

In situations where manufacturing activities are spread over several persons or stages, the person performing the last process making the goods marketable is considered the taxable person.

With the assent of the President, the Act authorises the levy and collection of the cess on:

The cess is levied in addition to all other applicable taxes and duties and is calculated monthly, in accordance with the rated speed or capacity of machines and the weight of goods packed, as specified in Schedule II.

For machine-assisted manufacturing, the cess is determined with reference to:

In cases of wholly manual manufacture, a fixed monthly cess applies per factory, subject to the condition that no machine capable of assisting any manufacturing process is installed.

Provision is made for abatement where machines or manual processes remain non-operational for a continuous period of fifteen days or more.

The Central Government, if satisfied that it is necessary in the public interest, may:

The cess collected under the Act is credited to the Consolidated Fund of India. Subject to parliamentary appropriation, the proceeds may be utilised for:

The Central Government may prescribe specific schemes, programmes, or activities for such utilisation.