Topped Up Cess Collection to Fund Schemes for States: FM

The Center has topped up the tax collected through various cesses to fund centrally sponsored schemes that are implemented in the state and trough which monies were transferred to states. Finance minister Nirmala Sitharaman said. In her reply to the finance and appropriation bills in the Rajya Sabha on Tuesday, she highlighted the utilization of the various cesses. Sitharaman was some responding to the criticism from some levying cesses and not spending the money collected Surcharge and cesses are not shared with states. Against the collections of Rupees 3.77 lakh crore from health and education ceses from 2013-14 to 2022-23, utilization was rupees 3.94 lakh crore, Sitharaman told the Rajya Sabha. She that rupees11.32 lakh crore was collected from the road and infrastructure cess levied on petrol and diesel from 2010-11 to 2022-23 and its utilization was at rupees 11.37 lakh crore. “Centre is adding from its kitty to the expenditure carried out from cess collected… It is not as if the Centre is not spending and sitting on collection,” Sitharaman said, dismissing the allegations that allegations that the Centre was earning from the cess and not sharing the funds with the states. Funds were being transferred to the states under various centrally sponsored schemes, the finance minister said.

The road and infrastructure cess, she said, was being utilised to create infrastructure such as roads, railways, drinking water, health and telecom in the entire country. She said it was used for development in all states, every regions and states that lack development, as also aspirational districts. “Surcharge and cess collected also go to states… they are used for states and for the purpose these are collected,” said Sitharaman. She said Article 271 of the Indian Constitution, all tax and duties, except surcharges and cesses levied – levied for specific purposes – shall be distributed between the Union and the states. The percentage of share for the sates in the net proceeds is recommended by the Finance Commission and as per Article 279 of the Constitution, the net proceeds of shareable central taxes are certified by the comptroller and Auditor General (CAG). “So, it is not as if I can determine something and say this is the CAG for any particular year… So, it is not a random subjective number,” she said. Sitharaman said states’ share for devolution in central taxes was projected at Rs 6.66 lakh crore as per the budget estimates (BE) of 2021-22, which was raised to Rs 7.45 lakh crore in the revised estimates (RE). “What I have actually devolved is Rs 8.35 lakh crore, Rs 1.69 lakh crore more than the BE and Rs 90,000 crore over the RE has been given,” said the finance minister. S-ET

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