Union Finance Minister Nirmala Sitharaman will present the the Union Budget 2024 on Feb 1, 2024.
Credit: PTI File Photo
The interim Budget for the upcoming fiscal year will be presented by Union Finance Minister Nirmala Sitharaman on February 1. Let's understand what cess means.
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.