What Is The Difference Between Tax And Cess?

By Roshni Agarwal| Updated: Thursday, February 22,

2018, 11:55 [IST] Often the terms tax and cess come across and as a lay-men there can be a case to
understand the similarity and the difference between the two, so here is made a simple attempt to
make you understand the two 'tax' and 'cess'.

Tax more broad a term as against cess and cess is an amount charged as % on tax amount payable:
The tax and cess differ on the ground that tax is a more broader term which applies to the
individual's income in case of direct taxation while cess is an amount payable on the tax amount
computed for a given individual. Sponsored Where Do The Richest Americans Live? Mansion Global
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Difference Between Tax And Cess? EXPAND Cess to promote particular govt targeted scheme: Cess
is introduced to promote a particular scheme which the govt feels needs attention as in the present
case, in the Union Budget 2018, the earlier education cess and secondary and higher Education has
been replaced by the 4% health and educational cess to promote the healthcare needs of the rural
population in India. Revenue amount collected through both the sources goes into some specified
fund: Both the amount charged from an individual do account for the exchequer's revenues which
find their accumulation in a separate fund conceived for the purpose. For instance, all of the taxes
collected by the govt be it direct or indirect are moved to specified funds constituted in accordance
with the Article 266 (1) of the Constitution of India. From here the funds are allocated or deployed
for different projects as per the Budget. On the contrary, funds mopped up through the cess route
are to be diverted for that sole purpose only. Types of taxes and cess: Tax range from direct to
indirect tax and now after the GST has subsumed some dozen taxes there are primarily income tax
and corporation tax charged to individuals and companies. While cess from time to time is being
introduced to cater to a particular scheme such as the earlier Krishi Kalyan scheme and Swacch
Bharat cess and now the educational and health care cess. It is to be noted that tax and cess do not
vary a great degree in meaning and purpose and ultimately is a source of revenue for the Indian govt
who provides a host of services to its citizens and charges for the same by levying taxes and cess.

Read more at: https://www.goodreturns.in/classroom/2018/02/what-is-the-difference-between-

tax-cess-679942.html

Cess and Surcharges

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telegram channel: Prelims Specific Notes for IAS

A cess imposed by the central government is a tax on tax, levied by the government
for a specific purpose.

Generally, cess is expected to be levied till the time the government gets enough
money for the earmarked purpose and not for any other purposes.In simple
words, a cess tax is an earmarked tax.
  If the purpose for which the cess is created is fulfilled, it should be
eliminated.
Article 270 of the Constitution describes a cess.

Cess may be levied by the union or state governments.

Cess are named after the identified purpose; the purpose itself must be certain
and for public good.

At present, the main cess are: education cess, road cess or (fuel cess), infrastructure
cess, clean energy cess, krishi kalyan cess and swachh bharat cess.