Lok Sabha Question No. 3645 (UNSTARRED), answered on 2025-08-11
Subject: Introduction and Utilisation of Cess
Ministry: FINANCE
Asked by: Shri G Kumar Naik

Government of India Ministry of Finance Department of Revenue

## LOK SABHA UNSTARRED QUESTION NO. 3645

TO BE ANSWERED ON MONDAY, AUGUST 11, 2025/SRAVANA 20, 1947 (SAKA)

## INTRODUCTION AND UTILISATION OF CESS

## 3645. SHRI G Kumar Naik :

Will the Minister of FINANCE be please to state:

- (a) the process by which cess is introduced in the country;
- (b) the specific legal provisions under Indian law that empower the Government to levy a cess;
- (c) whether there is any guidelines or criteria for the introduction and utilisation of such a cess;
- (d)  the  details  of  cesses  introduced  recently  and  the  purposes  for  levying  Cess  and  outcomes  expected  from  such cesses;
- (e) the details of amount of cess and surcharge collected by the Government along with the percentage increase during the last five years; and
- (f) whether the Government intends to cap the collection of cesses and surcharges at a certain percentage of gross tax revenue and include any excess in the divisible pool and if so, the details thereof?

## ANSWER MINISTER OF STATE IN THE MINISTRY OF FINANCE (SHRI PANKAJ CHAUDHARY)

- (a)    Cess  is  introduced  as  part  of     Finance  Bill  presented  in  the  Union  Budget  or  by  way  of  a  separate  act of Parliament.
- (b)  As per Article 270(1) of the Constitution of India, any cess levied for specific purposes under any law made by Parliament shall be levied and collected by the Government of India.
- (c)    Receipts  from  cesses  and  surcharges  form  part  of  Consolidated  Fund  of  India  and  are  used  to  finance  the development/welfare measures in the States through various Central Government schemes and initiatives.
- (d)  The details of cess introduced recently:
- (i) Agriculture Infrastructure and Development Cess (AIDC) was imposed vide Section 124 of the  Finance Act, 2021 as a duty of customs on specified imported goods for financing the agricultural infrastructure and other development expenditure.
- (ii) Health cess was imposed vide section 141 of  the Finance Act 2020, as a duty of customs on specified imported medical devices, for the purposes of financing the health infrastructure and services."
- (iii) Compensation Cess: A cess known as Compensation Cess is being levied on certain luxury and demerit goods as per  provision  under  Section  8  of  the  GST  (Compensation  to  States)  Act,  2017  for  the  purpose  of  payment  of compensation to States for any loss of revenue arising on account of implementation of GST for five years i.e. from 1st July, 2017 to 30th June, 2022. The cess is transferred into a non-lapsable Fund known as GST Compensation Fund which forms part of the Public Account of India as provided in Section 10(1) of the Act.
- ( e)      The  amount  of  cess  and  surcharge  collected  by  the  Government  during  the  last  five  year's  along  with  the percentage increase, on year-on-year basis, is enclosed as Annexure 'A'.
- (f) No Sir.

*******

## Statement showing details of Major Cesses and Surcharges levied and collected as part of principal taxes

## Annexure A

( ₹ crore )

| Sl.                        | Name of the levy and tax receipt heads         | Actuals 2020-21            | Actuals 2021-22            | YoY Growth                 | Actuals 2022-23            | YoY Growth                 | Actuals 2023-24            | YoY Growth                 | RE 2024-25                 | YoY Growth                 | BE 2025-26                 | YoY Growth                 |
|----------------------------|------------------------------------------------|----------------------------|----------------------------|----------------------------|----------------------------|----------------------------|----------------------------|----------------------------|----------------------------|----------------------------|----------------------------|----------------------------|
| MAJOR CESSES IN OPERATION: | MAJOR CESSES IN OPERATION:                     | MAJOR CESSES IN OPERATION: | MAJOR CESSES IN OPERATION: | MAJOR CESSES IN OPERATION: | MAJOR CESSES IN OPERATION: | MAJOR CESSES IN OPERATION: | MAJOR CESSES IN OPERATION: | MAJOR CESSES IN OPERATION: | MAJOR CESSES IN OPERATION: | MAJOR CESSES IN OPERATION: | MAJOR CESSES IN OPERATION: | MAJOR CESSES IN OPERATION: |
| 1                          | AGRICULTURE INFRASTRUCTURE& DEVELOPMENT CESS # | ...                        | 76950.68                   | …                          | 74142.03                   | -3.65%                     | 80923.6                    | 9.15%                      | 75180.00                   | -7.10%                     | 80030.00                   | 6.45%                      |
| 2                          | CESS ON CRUDE OIL                              | 10894.44                   | 19353.84                   | 77.65%                     | 21497.14                   | 11.07%                     | 18803.41                   | -12.53%                    | 17810.00                   | -5.28%                     | 19330.00                   | 8.53%                      |
| 3                          | CESSES ON EXPORTS                              | 9214.64                    | 1457.1                     | -84.19%                    | 852.44                     | -41.50%                    | -3.19                      | -100.37%                   | 10.00                      | -413.48%                   | 11.00                      | 10.00%                     |
| 4                          | GOODS &SERVICES TAX COMPENSATION CESS          | 85191.91                   | 104768.66                  | 22.98%                     | 125862.41                  | 20.13%                     | 141436.16                  | 12.37%                     | 153440.00                  | 8.49%                      | 167110.00                  | 8.91%                      |
| 5                          | HEALTH &EDUCATION CESS                         | 35821.55                   | 52732.33                   | 47.21%                     | 61809.29                   | 17.21%                     | 71156.96                   | 15.12%                     | 85300.00                   | 19.88%                     | 94000.00                   | 10.20%                     |
| 6                          | NATIONAL CALAMITY CONTINGENT DUTY              | 5098.81                    | 6138.3                     | 20.39%                     | 7168.3                     | 16.78%                     | 7812.25                    | 8.98%                      | 9610.00                    | 23.01%                     | 10380.00                   | 8.01%                      |
| 7                          | ROAD AND INFRASTRUCTURE CESS*                  | 235782.55                  | 195986.96                  | -16.88%                    | 59234.95                   | -69.78%                    | 44552.49                   | -24.79%                    | 45250.00                   | 1.57%                      | 47420.00                   | 4.80%                      |
|                            | Grand Total (1 to 7)                           | 382003.90                  | 457387.87                  | 19.73%                     | 350566.56                  | -23.35%                    | 364681.68                  | 4.03%                      | 386600.00                  | 6.01%                      | 418281.00                  | 8.19%                      |

( ₹ crore )

| Sl. No.                | Name of the levy and tax receipt heads     | Actuals 2020-21        | Actuals 2021-22        | YoY Growth             | Actuals 2022-23        | YoY Growth             | Actuals 2023-24        | YoY Growth             | RE 2024-25             | YoY Growth             | BE 2025-26             | YoY Growth             |
|------------------------|--------------------------------------------|------------------------|------------------------|------------------------|------------------------|------------------------|------------------------|------------------------|------------------------|------------------------|------------------------|------------------------|
| SURCHARGES LEVIED ON - | SURCHARGES LEVIED ON -                     | SURCHARGES LEVIED ON - | SURCHARGES LEVIED ON - | SURCHARGES LEVIED ON - | SURCHARGES LEVIED ON - | SURCHARGES LEVIED ON - | SURCHARGES LEVIED ON - | SURCHARGES LEVIED ON - | SURCHARGES LEVIED ON - | SURCHARGES LEVIED ON - | SURCHARGES LEVIED ON - | SURCHARGES LEVIED ON - |
| 1                      | Corporation Tax                            | 14078.57               | 15890                  | 12.87%                 | 55103.79               | 246.78%                | 60373.34               | 9.56%                  | 60000.00               | -0.62%                 | 70000.00               | 16.67%                 |
| 2                      | Taxes on Income other than Corporation Tax | 5537.78                | 7922.88                | 43.07%                 | 53914.24               | 580.49%                | 54793.8                | 1.63%                  | 76000.00               | 38.70%                 | 85000.00               | 11.84%                 |
| 3                      | Fringe Benefit Tax                         | 0.37                   | ...                    | …                      | ...                    | …                      | ...                    | …                      | ...                    | …                      | ...                    | …                      |
| 4                      | Social Welfare Surcharge under Customs     | 13447.39               | 16945.06               | 26.01%                 | 16178.79               | -4.52%                 | 16273.41               | 0.58%                  | 17250.00               | 6.00%                  | 17500.00               | 1.45%                  |
|                        | Grand Total (1 to 4)                       | 33064.11               | 40757.94               | 23.27%                 | 125196.82              | 207.17%                | 131440.55              | 4.99%                  | 153250.00              | 16.59%                 | 172500.00              | 12.56%                 |