The government has transferred Rs 24.29 lakh crore cess proceeds to various designated reserve funds during 2019-20 to 2024-25 as against total collection of about Rs 22.21 lakh crore, the finance ministry informed parliament on Tuesday. Responding to a question by Trinamool Congress MP Sushmita Dev, Minister of state for Finance Pankaj Choudhary told Rajya Sabha that the proceeds of such surcharge and cess go towards meeting certain specific needs such as financing of centrally sponsored schemes.
The minister did not explain the excess utilisation of taxes over total collection. However, economists said that the same could be due to borrowings by the central government to compensate the states for losses due to implementation of GST.
“The benefits of such expenditure also percolate to the states,” said the minister to a question if the government is considering including them in the divisible pool of taxes shared with the states. Article 270 of the Indian Constitution excludes the surcharge on taxes and duties and any cess levied for specific purposes under any law made by Parliament from the distribution between the Union and states.
The minister tabled a chart in parliament showing various cess and surcharge collected from 2020-21 till 2024-25, and the estimated collection for 2025-26. From 2020-21 to 2024-25, the total cess and surcharge collected was Rs 19.4 lakh crore, a third of which has been collected through GST compensation cess. Road and infra cess, which also includes additional duty of excise on petrol and diesel (which were known as road cess before introduction of road and infrastructure cess), accounted for 30% of the total collection of cess and surcharge, health and education cess, and agri infra development cess accounted for 16% each.
Cess and surcharge collected through corporate and income tax accounted for Rs 4 lakh crore during 2020-21 to 2024-25.