Finance Minister Nirmala Sitharaman will present the Union Budget on July 23, having already presented an Interim Budget ahead of the Lok Sabha elections. In light of the upcoming Budget, we take a look at some of the terms associated with the exercise.
What is cess?
A type of tax that is levied in addition to a taxpayer's base tax liability, cess is charged when the state or the federal government needs cash for a specific purpose.
Cess is applied to both indirect and direct taxes. Once the goal for which the cess was imposed is met, the cess is removed. It is not a long-term source of revenue for the government.
Let's understand how cess is different from other taxes such as income tax, GST, and excise duty.
All the other taxes are paid to the Consolidated Fund of India (CFI), cess may not be paid to the CFI at first. It, however, must be used for the purpose for which it was collected.
In case the cess collected is not spent in a given year, it cannot be used for anything else. The funds are carried over to the following year and can only be utilised for the purpose for which they were intended.
Unlike certain other taxes, the Centre does not have to split the cess with the states, either partially or entirely.
Union Budget 2024 | Making a record for any Finance Minister, Nirmala Sitharaman will be presenting her 7th Union Budget on July 23, 2024 under the Modi 3.0 government. While inflation has burnt a hole in the pockets of 'aam janata', will this Budget spell relief for Indians? Track the latest coverage, live news, in-depth opinions, and analysis only on Deccan Herald. Also follow us on WhatsApp, LinkedIn, X, Facebook, YouTube, and Instagram.
Published 19 July 2024, 12:45 IST