Parliament Winter Session 2025: Discussion on Tax and Company Law [Quick Recap]
So far, the 2025 Winter Session has focused on restructuring indirect taxes and advancing key reforms in company law and the Insolvency and Bankruptcy Code.
The Winter Session of Parliament, currently underway in New Delhi and scheduled from 1 to 19 December 2025. So far, this session has seen wide-ranging discussions on restructuring indirect taxes after the end of the GST compensation regime, introducing new cesses on tobacco and pan masala, updating state GST laws, reviewing major reforms to the Insolvency and Bankruptcy Code, and preparing amendments to the Companies Act and LLP Act.
Tax Updates: What Has Actually Changed?
A. Higher Excise Duty on Tobacco
One of the most significant developments this session is the increase in excise duty on tobacco products. Earlier, tobacco attracted a high GST Compensation Cess. With that cess ending, the government needed another way to maintain revenue and ensure that tobacco does not become cheaper.
The increase in excise duty solves both issues. It keeps tobacco prices from dropping, which supports public health objectives, and ensures that the Centre and the states continue to earn revenue. Since excise duty is shared with the states, this move helps balance state finances as well.
For ordinary consumers, the change means that cigarettes and other tobacco products may become more expensive. But from the government’s point of view, it is a necessary step to replace the expiring cess.
B. New Health and National Security Cess on Pan Masala
Pan masala taxation has been a complicated subject because the sector has a history of tax evasion and under-reporting. To address this, Parliament has introduced a new cess on pan masala, which will be used only for health and national security purposes.
A key change is that the cess is now linked to production capacity. In simple words, this means the tax is not based only on how much pan masala is sold, but on how much can be produced using the machines available. This method helps reduce tax leakage.
This move also ensures steady revenue for the government while discouraging overuse of these harmful products.
C. GST Change for Manipur
The Manipur Goods and Services Tax (Second Amendment) Bill, 2025 aims to bring the state’s GST law in line with recent Central GST changes and the GST Council’s push for uniformity. A major feature is the introduction of a track-and-trace system through a new Section 148A.
Certain goods and businesses will now need to affix a secure digital mark on products and maintain detailed records of machinery and production capacity. A new penalty provision, Section 122B, imposes a fine of one lakh rupees or ten percent of the tax due for failure to comply. The Bill also updates several definitions, clarifies the meaning of “plant and machinery,” and simplifies rules on vouchers and time of supply.
What About Income Tax? Many taxpayers look to the Winter Session hoping for changes in income tax slabs or deductions. But this year, the government has kept income tax steady. In August, Parliament passed the new Income-tax Act, 2025. That was a landmark reform that replaced the old 1961 Act. The Finance Ministry is expected to introduce new simplified return forms next year, but no major tax updates have been announced in this session so far.
Company Law and IBC: Preparing the Ground for Reform
Along with tax laws, the government is also working on improving corporate law and insolvency processes.
A. IBC Amendment Bill 2025: Major Changes Under Review
One of the biggest ongoing discussions is around the Insolvency and Bankruptcy Code. A new amendment bill is being reviewed by a Parliamentary Select Committee. The goal is to reduce delays in insolvency cases and make the process smoother for creditors, companies and homebuyers.
Some of the ideas being considered include the following:
- Allowing creditors to try out-of-court settlements before going to the National Company Law Tribunal. This may reduce the number of cases burdening the tribunal.
- Splitting the approval process into two stages. First, the CoC checks whether the resolution plan itself is viable. Then the plan’s distribution details are approved separately. This helps prevent disputes that often slow down cases.
- Making special provisions for real estate companies. Instead of dragging an entire builder into insolvency, individual projects may be handled separately to protect homebuyers.
Apart from these proposed changes, new regulations for Insolvency Professionals have already been issued. The aim is to improve accountability and prevent professionals from outsourcing key responsibilities.
B. Corporate Laws Amendment Bill 2025: Modernising the Companies Act and LLP Act
Another major development is the preparation of a new Corporate Laws Amendment Bill. This bill is expected to update both the Companies Act and the LLP Act to make them more suited to modern business needs.
The bill may include provisions such as allowing multidisciplinary professional firms, enabling farmers and artisans to form LLPs, and strengthening audit oversight. If passed, these changes would bring India’s corporate framework closer to international standards.
The bill is likely to be introduced this session, but detailed debate and passage may happen in the Budget Session early next year.
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