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Swacchh Bharat Cess


In order to enhance the country’s economy and boost its development, government collects taxes which act as a source of generating income for various development projects. In India, taxes are decided by mutual agreement of central government and state government along with opinions given by local bodies including municipalities which implement the smaller taxes with their jurisdiction. But, government cannot impose any kind of tax as per its wishes. Recently, the central government has imposed 0.5% Swacchh bharat cess on all services.

Telecom-fuel-cess-to-fund-Swachh-drive

According to union government the income generated by this 0.5% Swacchh bharat cess will be used in various Swacchh bharat initiatives.

  • A provision for assessing a Swachh Bharat cess on all or any of the services in order to promote and finance Swachh Bharat initiatives as proposed in the Union Budget for 2015-16 by the Finance Minister Arun Jaitley.
  • According to government estimations, with the increased allocation for Swacchh Bharat Abhiyan, various diseases can be prevented. At present, an estimated Rs.6,700 crore or about Rs.60 per capita is spent annually on health.

Impact of Swacchh bharat cess in India

  • Cess is treated as an idle tax in public finance. It would be collected easily but adversely it has overburdened the poorest section of taxpayers and is regarded as a regressive tax in middle class society.
  • Cess is directly enhancing the cost of doing business in the country as it is imposed on top of the array of indirect and direct taxes.
  • Cesses function only temporarily for the specified purpose and gradually as the time passes, they are revised, hiked and shifted around, but never discontinued.
  • In fact the Direct Taxes Code of 2009 and the Economic Survey of 2014 have advice the Centre to do away with ‘bad taxes’ such as cesses and surcharges.

Why states are not happy with the new cess?

  • Surcharges and cesses are not shared with the state government like the taxes collected by the central government. It is because of this reason state government is looking suspiciously towards the new Swacchh bharat cess.
  • The new cess also goes against the idea of fiscal federalism.

Conclusion

Swacchh bharat cess has been imposed with an aim that each individual must contribute towards Make in India so that it becomes Clean India. But it is very far away in achieving its aim. This new cess is only overburdening the poor taxpayers instead of teaching proper civic sense. In order to make India a Clean India, government must take some serious measures to teach every citizen civic sense which can include many grass-root initiatives such as door-to-door garbage collection, segregation at source and emphasising on waste management systems in our cities, villages and towns.

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