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Current Affairs Question - 06 March 2021
National Government Policies And Interventions
Cess And Surcharge
Consider the following statements:
- Cess is a form of tax levied or collected by the government for the development or welfare of a particular service or sector.
- Surcharge is an additional charge or tax levied on an existing tax.
- Unlike a cess, which is meant to raise revenue for a temporary need, surcharge is usually permanent in nature.
- Currently, the cess and surcharge collected by the Centre are not part of the tax devolution.
Which of the statement(s) given above is/are correct? Choose the correct answer from the codes given below:
A |
1 and 2
|
|
B |
2 and 3
|
|
C |
3 and 4
|
|
D |
1,2 , 3 and 4
|
Your Ans is
Right ans is D
Explanation :
Context: The share of cess and surcharge in the gross tax revenue (GTR) of the Centre has almost doubled to 19.9% in 2020-21 from 10.4% in 2011-12.The 15thFinance Commission has recommended a higher grant-in-aid and lower tax devolution to the States.
About Cess
- It is a form of tax levied or collected by the government for the development or welfare of a particular service or sector.
- It is charged over and above direct and indirect taxes.
- Cess collected for a particular purpose cannot be used for or diverted to other purposes.
- It is not a permanent source of revenue for the government, and it is discontinued when the purpose levying it is fulfilled.
- Currently, the cess and surcharge collected by the Centre are not part of the tax devolution.
- Examples: Education Cess, Swachh Bharat Cess, Krishi Kalyan Cess etc.
About Surcharge
- Surcharge is an additional charge or tax levied on an existing tax.
- Unlike a cess, which is meant to raise revenue for a temporary need, surcharge is usually permanent in nature.
- It is levied as a percentage on the income tax payable as per normal rates. In case no tax is due for a financial year, then no surcharge is levied.
- The revenue earned via surcharge is solely retained by the Centre and, unlike other tax revenues, is not shared with States.
- Collections from surcharge flow into the Consolidated Fund of India.
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