Cess Latest News
As of 2023-24, the Central Government has failed to transfer ₹3.69 lakh crore worth of cess collections to the relevant funds for which the cess was implemented, the Comptroller and Auditor General has found.
About Cess
- A cess is a form of tax levied by the government on tax with specific purposes till the time the government gets enough money for that purpose.Â
- Different from the usual taxes, and duties like excise and personal income tax, a cess is imposed as an additional tax besides the existing tax (tax on tax).Â
- For example, the Swachh Bharat cess is levied by the government for cleanliness activities that it is undertaking across India.
- A cess, generally paid by the everyday public, is added to their basic tax liability paid as part of total tax paid.
Difference between Tax and Cess
- A cess is different from taxes as it is imposed as an additional tax besides the existing tax (tax on tax).Â
- Another difference lies in the way the revenue recovered from the cess is maintained.Â
- While revenue from taxes like income tax is kept in the Consolidated Fund of India (CFI), and the government can use it for any purposes it deems fit, the revenue coming from cess is first credited to the Consolidated Fund, and the government may then, after due appropriation from Parliament, utilise it for the specified purpose.
- Â Another major difference between central taxes and cess is that the proceeds of a cess may or may not be shared with the state governments, while that of taxes have to be shared.
Source: TH
Cess FAQs
Q1: How is a cess different from normal taxes like income tax or excise duty?
Ans: It is levied as an additional tax on an existing tax.
Q2: What is the primary purpose of imposing a cess?
Ans: To finance specific government initiatives.
Q3: What is the main difference between a cess and a surcharge?
Ans: Cess revenue is earmarked for specific purposes, surcharge revenue can be used for any purpose.
