Revenue Secretary Hasmukh Adhia said levy of cesses will be sparingly done after the goods and services tax (GST) is rolled out.
Responding to criticism regarding levy of more cesses in the Union Budget 2016-17, Revenue Secretary Hasmukh Adhia said it was required as the Central government’s revenues have been impacted due to higher devolution of tax share to states. He said levy of cesses will be sparingly done after the goods and services tax (GST) is rolled out. Excerpts:
There are too many cesses being levied while we are moving towards GST …
The reason for this is that when we go towards GST we should have a single, uniform rate. That’s one year away from now at least as it appears and till the Constitution Bill is passed. But till then this power of cess is available with the Government of India and in view of the fact that because of 7th Finance Commission the government’s revenues have considerably reduced and 10 per cent increase in devolution to states has really put pressure on our revenue. On top of it, if there is responsibility for spending on infrastructure, rural areas — at a time when private sector spending is not happening — the government has to take a call. So, where will Government of India will bring the money from? Cess is one way of increasing our resources because cess and surcharges are non-shareable. That’s why the Centre gets extra kitty. People don’t get too much burden of tax, and the government has got some extra kitty available for this useful purpose.