Friday, June 14, 2024

No share for states in cess: Sitharaman

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Union Finance Minister Nirmala Sitharaman has clarified that the states will not have a share in the cess and surcharge on taxes collected by the Centre for specific purposes.

Answering a question asked by YSRCP member V Vijayasai Reddy in the Rajya Sabha on Tuesday, the Finance Minister said that the amount collected in the name of cess, surcharge, and other duties will be fully utilised by the Central government.

The Union Finance Minister said that for the year 2014-15, Rs 82,914 crore was collected by the Centre in the form of cess. She said that for the financial year 2021-22, the amount of cess collected was Rs 3,52,728 crore. The Minister was replying to another question about the details of the formula recommended by the 15th Finance Commission on the share of the taxes collected by the Centre to the states. The 15th Finance Commission recommended that 41 percent of the taxes collected by the Centre be distributed to the states. The 15th Finance Commission award, which will be in effect from 2020-21 to 2025-26, has prescribed certain criteria for the distribution of tax shares to states. The State has given weightage of 15 percent to the population, 15 percent to the geographical area, 10 percent to forest and environment, and 45 percent to revenue sources.

The Minister explained that the Finance Commission had recommended that the share of states in Central taxes should be determined on the basis of these parameters.

Accordingly, Bihar got 10 percent, Uttar Pradesh 17 percent, Madhya Pradesh got 7 percent and Andhra Pradesh got only 4 percent. Following the recommendations of the 15th Finance Commission, Andhra Pradesh received Rs 24,460 crore in the financial year 2020-21, Rs 35,385 crore in 2021-22, and Rs 38.176 crore in 2022-23 as per the revised estimates of Central tax distribution, the Minister disclosed.

Also, according to the 2023-24 budget estimates, Rs 41,338 crore would be given to Andhra Pradesh as its share in Central taxes, she said.

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