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Tobacco bill to be introduced in Parliament’s winter session, cess suspended

The central government is expected to introduce legislation in Parliament’s upcoming winter session aimed at imposing a tax on tobacco and related products. This proposed tax may replace the existing GST compensation cess currently applied to these items.

The existing compensation cess, which operates alongside the 28% GST, is anticipated to remain in effect for at least three months. This allowance will enable the government to fulfill its loan repayment obligations to states for the losses they incurred during their transition to the GST system implemented eight years ago. Traditionally, Parliament’s winter session begins in late November or early December.

In a recent GST Council meeting, Union Finance Minister Nirmala Sitharaman announced that the current GST rates and compensation cess would persist on products such as pan masala, gutkha, cigarettes, and other tobacco goods, including zarda, unmanufactured tobacco, and bidi, until the loans are settled in full. Following this, these items will be subjected to a higher GST rate of 40%, negating the existing compensation cess.

An official source quoted by the Economic Times indicated that there may be an alternative levy introduced to replace the compensation cess while still keeping tax levels consistent on tobacco products. On tobacco, the GST part is settled at 40%, and we expect the compensation cess period to be over by this calendar year. So, there is time to weigh some options on the table. But a decision will be made in due course,” the source stated.

Currently, these products face a total indirect tax rate of 53%, which consists of a 28% GST rate, compensation cess, central excise duty, and national calamity contingent duty. The original deadline of October 31 for terminating the compensation cess was based on projected monthly collections of around Rs 10,000 crore.

However, with luxury cars, coal, and aerated drinks no longer subject to compensation cess as of September 22—when revised GST rates take effect—the monthly cess collections are expected to decline, ultimately prolonging the loan repayment period for the states.

Government Employees Great News Minimum Pay Rise to INR 30,000 Update

The implementation of the 8th Central Pay Commission (CPC) may still be a couple of years away, with Kotak Institutional Equities projecting a rollout by late 2026 or early 2027. In its latest report, Kotak said that the Centre is yet to appoint members to the Commission and is still finalising its Terms of Reference (ToR). Based on past patterns, the 6th and 7th CPCs took about 1.5 years to submit their reports, followed by a 3–9 month wait for Cabinet approval and rollout.

A key projection by Kotak is a significant hike in the minimum salary level—from ₹18,000 to ₹30,000 per month—implying a fitment factor of 1.8 and a real pay increase of around 13%. This hike is expected to directly impact around 3.3 million central government employees, with Grade C staff (who make up nearly 90% of the workforce) likely to benefit the most.

The brokerage pegs the fiscal cost of implementing the 8th CPC at 0.6–0.8% of GDP, translating to an additional outlay of ₹2.4–3.2 lakh crore. Historically, CPC payouts have provided a short-term boost to consumption and savings, especially in sectors like automobiles and consumer staples. However, Kotak notes that this impact usually lasts for less than a year.

Citing RBI data, the report also recalled that the 7th CPC and the One Rank One Pension (OROP) scheme had together added about two percentage points to India’s GDP growth in FY17. In terms of savings, Kotak estimates that Rs 1–1.5 lakh crore could flow into physical and financial assets, including equities and bank deposits, from the expected pay hike cycle.

Meanwhile, the central government has officially acknowledged that it has received ToR suggestions from the Staff Side of the National Council of Joint Consultative Machinery (NC-JCM), a key employee representative body. The inputs have also been sought from major ministries like Defence, Home Affairs, and the Department of Personnel and Training.

The NC-JCM has submitted 15 major recommendations for the 8th Pay Commission. These include broad employee coverage, including Central Government, Defence, UT, and Grameen Dak Sewaks—along with a revised pay structure effective January 1, 2026. The Council has also urged that the minimum wage be based on modern living standards, with a revised Aykroyd formula and 3.6 consumption units per family.

Other major demands include merging overlapping pay levels, fixing anomalies in the Modified Assured Career Progression (MACP) scheme, merging DA/DR with basic pay, restoring the old pension scheme, and improving CGHS medical benefits. The Council also called for extending education allowances up to post-graduate level, restoring need-based advances, and providing risk allowances for railway and defence civilian staff.

Though the 8th CPC promises a substantial boost in employee incomes, Kotak emphasized that the government is likely to proceed cautiously, given the fiscal implications. For now, the timeline and scope are still evolving, but the roadmap suggests a major salary revision is on the horizon.

Keywords: 8th Pay Commission, CPC 8 rollout, Kotak report, minimum salary ₹30,000, central govt salary hike, fitment factor 1.8, MACP reform, NC-JCM ToR, DA DR merger, NPS rollback, old pension scheme demand, CGHS reform, India salary revision 2026

7th Pay Commission: Basic Salary Of Central Government Employees May Increase By Rs 8000

There is good news for central government employees. After getting Dearness allowance, HRA, TA, promotion, now they can get another gift. There may be a bumper increase in the salary of central government employees (CG employees) in the year 2022. If sources are to be believed, then the fitment factor of central and state employees can be increased. With the increase in fitment, there will be a significant increase in the basic salary of central government employees.

May soon consider

Let us tell you, there has been a long-standing demand of the central and state government employees that their fitment factor should be increased from 2.57 times to 3.68 times. According to sources, the government can consider this demand of central government employees. However, due to the code of conduct due to the elections, it may get delayed a bit. But, it is expected that the month of March will bring tremendous benefits for the central government employees. Their fitment factor can be decided as a gift of Holi.

Basic salary may increase by Rs 8000

If a decision is taken regarding the fitment factor of central government employees, then their basic salary will increase directly. In fact, increasing the fitment factor will lead to an increase in the minimum wage. The employees are currently getting salary on the basis of fitment factor 2.57. Now it can be increased to 3.68. If this happens, then there will be an increase of 8 thousand rupees in the minimum salary of the employees. This means that the salary received till now Rs 18,000 will increase to Rs 26,000.

Considering doing 3 times fitment factor

A section of the government also believes that the minimum salary under 7th pay commission can be increased to 3 times, not 3.68 times directly. According to the recommendations of the 7th Pay Commission, the government can increase the fitment factor by 3 times. If the fitment factor is 3 times, the basic pay of the employees will increase from Rs 18,000 to Rs 21,000. This means it will increase by Rs 3000.

Public Debt Management report for the quarter of January March 2021released

During Quarter 4 of FY21, the Central Government issued dated securities worth Rs 3,20,349 crore as against Rs 76,000 crore in Q4 of FY20, while repayments were at Rs 29,145 crore. The weighted average yield of primary issuances increased to 5.80 per cent in Q4 FY21 from 5.68 percent in Q3 of FY21. The weighted average maturity of new issuances of dated securities was lower at 13.36 years in Q4 of FY21 as compared to 14.96 years in Q3 of FY21.

During January – March 2021, the Central Government did not raise any amount through the Cash Management Bills. The Reserve Bank conducted nine special and normal Open Market Operations involving simultaneous purchase and sale of government securities during the quarter. The net daily average liquidity absorption by RBI under Liquidity Adjustment Facility (LAF) including Marginal Standing Facility and Special Liquidity Facility was at Rs 3,35,651 crore during the quarter.

Total liabilities (including liabilities under the ‘Public Account’) of the Government, as per provisional data, increased to Rs 1,16,21,781 crore at end-March 2021 from Rs 1,09,26,322 crore at end-December 2020. This represented a quarter-on-quarter increase of 6.36 percent in Q4 FY21. Public debt accounted for 88.10 per cent of total outstanding liabilities at end-March 2021. Nearly 29.33 per cent of the outstanding dated securities had a residual maturity of less than 5 years. The ownership pattern indicates the share of commercial banks at 37.8 percent and at 25.3 percent for insurance companies at end- March 2021.

The yields on Government securities hardened in the secondary market due to increase in supply of G-secs during the quarter. Further, hardening of yields was more on the short end of the curve due to increase in weekly borrowing and also announcement of resumption of normal liquidity operations by the Reserve Bank. However, the yields were supported by decision of MPC meetings held on 5th February, 2021, wherein MPC kept the Policy repo rate unchanged at 4 percent and reiterated to continue with accommodative stance, at least during the current financial year and into the next financial year – to revive growth on a durable basis and mitigate the impact of COVID-19 pandemic on the economy, while ensuring that inflation remains within the target going forward.

Since April-June (Q1) 2010-11, Public Debt Management Cell (PDMC), Budget Division, Department of Economic Affairs, Ministry of Finance, has been bringing out a quarterly report on debt management on a regular basis.

CLICK HERE to access the report

Government reduces IGST on import of oxygen concentrators for personal use to 12 percent

Amid the acute shortage of medical oxygen in several parts of the country due to surge in COVID cases, the Finance Ministry on Saturday reduced the Integrated Goods and Service Tax (IGST) rate on the import of the oxygen concentrators for personal use from 28 percent to 12 percent. This rate will be applicable till June end.

As per the Ministry of Finance notification, IGST on import of oxygen concentrators for personal use has been reduced from 28 percent to 12 percent to bring IGST rate on such personal import at par with commercial import of the same. This reduced IGST rate for imports of concentrators for personal use shall be applicable upto June 30, 2021. Meanwhile, the government revised the Foreign Trade Policy, 2015-2020 and permitted the import of oxygen concentrators for personal use amid a massive surge in COVID cases in the country.

An official press release from the Ministry of Commerce and Industry stated that the oxygen concentrators have been added to the list of exempted categories, where custom clearance is sought as “gifts”. These oxygen concentrators can be procured through post, courier or e-commerce portals. The exemption for oxygen concentrators is allowed till July 31, 2021 for personal use according to notification of the Directorate General of Foreign Trade.

‘COVID-19 Helpdesk’ for international trade related issues operationalized by DGFT

In view of the surge of COVID-19 cases, a helpdesk has been operationalized by the Director General of Foreign Trade (DGFT) to monitor the status of imports and exports, and difficulties being faced by the trade stakeholders. This ‘COVID-19 Helpdesk’ would look into issues relating to Department of Commerce, import and export licensing issues, custom clearance delays and complexities arising thereon, import/export documentation issues, banking matters, etc.

This helpdesk will also collect and collate trade related issues concerning other ministries, departments, agencies of central government and state government and will coordinate to seek their support and provide reasonable resolutions. The status of resolutions and feedback may be tracked using the status tracker under the DGFT Helpdesk services. Email and SMS would also be sent as and when the status of these tickets are updated.

Tax Associations Come Together against Wrong Implementation of Tax Laws in India

Tax Associations Come Together against Wrong Implementation of Tax Laws in India

As we all know that tax implementation in our country is very poor. When portals are not working, government extend due dates but when taxpayers are not able to do compliance due to any reason/ pandemic, government is not extending due dates and taxpayers are suffering heavy late fees. Even government is disposing thousands of representation by mentioning some illogical reasons in tweets.

Therefore, for the welfare of taxpayers as well as professional community, many tax associations led by The Western Maharashtra Tax Practitioners’ Association have come together against wrong implementation of acts and working system of government departments as well as respective Ministries of the Central Government.

List of all tax associations is as under :

All tax associations have submitted their representations to respective offices as well as to Central Government. let’s hope for the best 🙂

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5th round of talks between Central Government and representatives of farmers concludes

The 5th round of talks between Centre and representatives of farmers concluded on Saturday.The next and 6th round of meetings on 9th of December. Union Agriculture Minister Narendra Singh Tomar has reassured the farmers’ Unions that the system of Minimum Support Price, MSP will continue and there is no threat to it. He said, it is baseless to create doubt over this. He said that the Agricultural Produce Market Committee, APMC Act is related to the State and neither it is the intention of the government to affect the mandis in the States, nor are they affected by the law. He said, the Central government is ready to do anything in its power to further strengthen APMC Act and if anyone has any misconception regarding APMCs, then it is absolutely ready to resolve it. He further said during the meeting, they have requested the farmers’ Unions to send elderly and children back home in wake of Covid-19 situation and cold weather conditions.

Tag: CENTRAL GOVERNMENT