Ex-cess taxes: The sneaky ways the sarkar has of taking away your money


While everyone was talking about the Goods and Services Tax (GST) and wondering when the parliamentary logjam would allow it to be passed, the Union skill development ministry was proposing a new 2% tax on individual and corporate incomes in order to fund the government’s ambitious Skill India programme which is estimated to require an annual expenditure of Rs 4 lakh crore.

However, the skill development minister, Rajiv Pratap Rudy, skilfully sidestepped using the word tax and instead employed the term cess. To refill its ever-depleted coffers, every now and then – generally more now than then – the government takes the cess route to revenue.

There are already 27 different cesses – the last one being the 0.5% cess to finance the Swachh Bharat campaign – which together account to a reported 17% of all Central government earnings.

What is a cess? A cess is simply a tax by any other sneaky name; it is taxation through the back door.

Whenever the sarkar finds itself short of cash it springs a new cess on the already overburdened taxpayer, who is also having to shell out, besides income tax, sales tax, service tax, value added tax, entertainment tax, luxury tax, wealth tax, gift tax, tax deducted at source, and a tax which goes by the alias of octroi duty.

The result is that taxpayers feel that they have literally been taxed beyond endurance, and have developed an allergic reaction to the very mention of the term and are likely to go into a fiscal version of anaphylactic shock at the prospect of having yet another tax foist upon them.

So the sarkar – considerate as it always is about the well-being of the populace which has voted it into office – substitutes the hateful three-letter word with the four-letter euphemism, cess.

The other good thing about cess is that – unlike the cold-storaged GST – it doesn’t need a parliamentary nod to come into effect. It can be imposed at will to be funnelled into the bottomless pit of sarkari expenditure. A pit that increasingly is resembling a cess-pit.


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