Union Fertilizers Minister Jagat Prakash Nadda inaugurated an integrated e-bill system on Thursday that will enable the government to process fertilizer subsidies worth approximately ₹2.00 lakh crore. The digital platform represents a significant transformation from manual, paper-based processes to a fully automated workflow, eliminating the physical movement of bills entirely, according to an official statement.

Digital Transformation Initiative

The system marks a major shift towards technology-driven governance in fertilizer subsidy management. "This online system will play a significant role in strengthening transparent, efficient and technology-driven governance," Nadda stated at the launch event. Fertilizers Secretary Rajat Kumar Mishra described the launch as "a major milestone in modernising the department's financial operations."

Technology Partnership Framework

The initiative stems from a technological collaboration between two key financial management systems. The Integrated Financial Management System (IFMS) of the Department of Fertilizers has partnered with the Public Financial Management System (PFMS) of the Controller General of Accounts, Ministry of Finance, to create this comprehensive digital platform.

Enhanced Transparency and Control

Controller General of Accounts Santosh Kumar emphasized that the transformation "significantly enhances transparency and accountability by creating a centralised and tamper-proof digital audit trail for all financial transactions, thereby facilitating easier monitoring and audits." The system provides real-time oversight of expenditures and strengthened financial control, with all payments tracked and reported centrally.

Key transparency features include:

• Centralised digital audit trail for all transactions
• Real-time expenditure oversight
• Tamper-proof transaction records
• Enhanced monitoring capabilities for audits

Operational Benefits for Companies

The e-Bill platform transforms how fertilizer companies interact with the subsidy system. Companies can now submit claims online and track payment status in real time, eliminating the need for physical visits and manual follow-ups. Joint Secretary Manoj Sethi noted that the system "enables end-to-end digital bill processing, which will significantly accelerate payment timelines, including timely release of weekly fertilizer subsidy payments."

Built-in Security and Fraud Prevention

The system incorporates robust built-in controls designed to ensure payment accuracy and prevent fraudulent activities. These controls validate payments against predefined criteria, log every action for comprehensive audit purposes, and significantly reduce the risk of fraud. The platform enforces a standard electronic workflow, including first-in-first-out bill processing, ensuring consistency and compliance with established financial rules throughout the subsidy distribution process.

The Government of India has officially notified significant changes to tobacco taxation effective February 1, with cigarettes and tobacco products now attracting 40% GST while bidis will face 18% GST. The new framework replaces the existing GST compensation cess and introduces a machine capacity-based excise duty system designed to curb tax evasion in the tobacco sector.

New Tax Structure and Implementation

The Finance Ministry's notification confirms that the Health and National Security Cess on pan masala and additional excise duty on tobacco products will be levied over and above the revised GST rates. This comprehensive overhaul marks the end of the GST compensation cess regime that has been in place since 2017.

Machine Capacity-Based Excise Duty Framework

The government has introduced the Chewing Tobacco, Jarda Scented Tobacco and Gutkha Packing Machines (Capacity Determination and Collection of Duty) Rules, 2026. Under Section 3A of the Central Excise Act, manufacturers must pay excise duty based on the determined annual capacity of production rather than reported production volumes.

The capacity-based system addresses widespread evasion through undeclared or intermittently operated packing machines. Manufacturers will pay duty based on retail sale prices and maximum rated machine speed during verification periods.

Excise Duty Calculation Examples

The notification provides specific calculation methods for different machine capacities and retail sale prices:

Manufacturers installing machines mid-month must pay full monthly duty regardless of actual production days, as per Rule 13(3).

Industry Impact and Price Projections

Industry sources continue to project cigarette price increases of 20.00%-30.00% as manufacturers adjust to the higher tax burden. The shift from compensation cess to the new excise duty framework represents one of the most significant changes to India's sin-tax structure since GST implementation.

Constitutional Framework and Compliance

The government maintains constitutional validity under Article 270 and Entry 97 of the Union List. The compliance framework requires upfront declaration of machine parameters, Chartered Engineer certification, and CCTV monitoring to ensure accurate capacity determination and prevent manipulation of production reporting.