Lok Sabha Question No. 96 (STARRED), answered on 2016-04-29
Subject: Education Cess
Ministry: FINANCE
Asked by: BHARTRUHARI MAHTAB, SANJAY SHAMRAO DHOTRE

## GOVERNMENT OF INDIA MINISTRY OF FINANCE

## DEPARTMENT OF REVENUE

## LOK    SABHA

## STARRED QUESTION NO. *96

TO BE ANSWERED ON FRIDAY, THE 29 TH  APRIL, 2016 9 TH Vaisakha, 1938 (SAKA)

## EDUCATION CESS

*96. SHRI BHARTRUHARI MAHTAB:

SHRI SANJAY DHOTRE

Will the Minister of FINANCE be pleased to state:

- (a)  the  details  of  the  education  cess  levied,  modus  operandi  of  its  allocation  and amount collected on income tax since its inception across the country; (b) whether the Government has utilised the education cess collected so far, if so, the details thereof and if not, the reasons therefor; (c)  the  details  of  the  schemes/  programmes  identified  so  far  for  utilisation  of education cess; (d)  whether  the  Government  has  conducted  any  study  for  utilisation  of  education cess before imposing it on income tax; and (e) if so, the details thereof and if not, the reasons therefor along with the other steps taken/being taken by the Government for effective use of the corpus collected by the
- Government through education cess?

## ANSWER FINANCE MINISTER (SHRI ARUN JAITLEY)

(a) to (e): A Statement is laid on the Table of the House.

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## STATEMENT AS REFERRED TO IN REPLY TO PARAs (A) to (E) OF LOK SABHA STARRED QUESTION NO. *96 FOR ANSWER ON 29 TH  APRIL, 2016 / 9 TH VAISAKHA, 1938 (SAKA) REGARDING EDUCATION CESS

(a) to (c) Details of education cess, which is additional surcharge for purposes of the Union, levied are as under:

- (i)      'Education Cess on income-tax', calculated at the rate of two per cent of the incometax and surcharge so as to fulfill the commitment of the Government to provide and finance universalised quality basic education,
- (ii) 'Secondary and Higher Education Cess on income-tax', calculated at the rate of one per  cent  of  the  income-tax  and  surcharge  so  as  to  fulfill  the  commitment  of  the Government to provide and finance secondary and higher education.

(iii) Education cess collected under indirect taxes is leviable @ 2% on the aggregate duties of Customs. Secondary and Higher Education Cess is leviable @1% on the aggregate duties of Customs. Education Cess & Secondary and Higher Education Cess  on  excisable  goods  were  subsumed  in  Central  Excise  Duty,  w.e.f  1.3.2015, and  standard  CENVAT  rate  was  rationalized  at  12.5%.  Education  cess  and Secondary and Higher Education cess on taxable services was subsumed in Service Tax, which was rationalized at 14%, w.e.f. 1.6.2015.

| Financial Year               | Education Cess collected under Direct Taxes (Rs. in Crore)   | Education Cess collected under Direct Taxes (Rs. in Crore)   | Education Cess collected under Direct Taxes (Rs. in Crore)   |
|------------------------------|--------------------------------------------------------------|--------------------------------------------------------------|--------------------------------------------------------------|
| Financial Year               | Primary Education Cess                                       | Secondary & Higher Education Cess                            | Total Education Cess                                         |
| 2004-05                      | 1787.39                                                      | 0                                                            | 1787.39                                                      |
| 2005-06 1490.07              | 0                                                            |                                                              | 1490.07                                                      |
| 2006-07 4395.23              |                                                              | 0                                                            | 4395.23                                                      |
| 2007-08 5977.86              |                                                              | 2978.9                                                       | 8956.76                                                      |
| 2008-09 6408.02              |                                                              | 3197.32                                                      | 9605.34                                                      |
| 2009-10                      | 7067.72                                                      | 3533.45                                                      | 10601.17                                                     |
| 2010-11                      | 8479.91                                                      | 4238.51                                                      | 12718.42                                                     |
| 2011-12 9648.86              |                                                              | 4819.62                                                      | 14468.48                                                     |
| 2012-13                      | 10543.88                                                     | 5267.99                                                      | 15811.87                                                     |
| 2013-14                      | 12041.74                                                     | 6015.98                                                      | 18057.72                                                     |
| 2014-15                      | 13198.54                                                     | 6594.82                                                      | 19793.36                                                     |
| 2015-16* up to February 2016 | 10215.98                                                     | 5158.56                                                      | 15374.54                                                     |

* Provisional

|                | Education Cess collected under Indirect Taxes (Rs. in Crore)   | Education Cess collected under Indirect Taxes (Rs. in Crore)   | Education Cess collected under Indirect Taxes (Rs. in Crore)   |
|----------------|----------------------------------------------------------------|----------------------------------------------------------------|----------------------------------------------------------------|
| Financial Year | Primary Education Cess                                         | Secondary & Higher Education Cess                              | Total Education Cess                                           |
| 2372.41        | -                                                              |                                                                | 2004-05 2372.41                                                |
| 3828.55        | -                                                              |                                                                | 2005-06 3828.55                                                |
| 4644.25        |                                                                | 212.44                                                         | 2006-07 4856.69                                                |

| 2007-08                     |   5702.50 |   1709.32 |   7411.82 |
|-----------------------------|-----------|-----------|-----------|
| 2008-09                     |   5270.68 |   2070.62 |   7341.3  |
| 2009-10                     |   4405.79 |   2057.76 |   6463.55 |
| 2010-11                     |   5860.72 |   2948.36 |   8809.08 |
| 2011-12                     |   7134.14 |   3208.54 |  10342.7  |
| 2012-13                     |  10272.6  |   4556.98 |  14829.6  |
| 2013-14                     |  10644.9  |   5199.78 |  15844.6  |
| 2014-15                     |  10891.3  |   5301.49 |  16192.8  |
| 2015-16* up to January 2016 |   3814.93 |   1841.01 |   5655.94 |

* Provisional

(d) and (e) Education Cess on income-tax was introduced through Finance (No. 2) Act, 2004 for the first time. This cess was levied as the National Common Minimum Programme (NCMP) mandated for levy of education cess. Further, Secondary and Higher Education Cess on income-tax was introduced through Finance Act, 2007 for the first time. Prarambhik Shiksha Kosh has been created using the Education Cess. The  proceeds  of  Prarambhik  Shiksha  Kosh  are  used  in  the  schemes  of  Sarva Shiksha Abhiyan and Mid Day Meal Scheme and remaining amount is spent on the funding of other schemes of Ministry of Human Resource and Development.

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