Cess excess eats into states’ revenue

 

Cess excess eats into states’ revenue

Initiating(शुरुआत/आरंभ करना) the recent no-confidence motion, Telugu Desam Party MP Galla Jayadev raised(उठाया/स्थापित) a point about the devolution(हस्तांतरण/सौंपना) to the states being only 36-37% of the Centre’s resources(संसाधन/संपदा) against the promised 42%. His point is valid. Blame it on cesses, kept outside the divisible(विभाजित/बँटने लायक ) pool. Galla did not take into account a Rs 8 per litre ‘road and infrastructure(आधारिक संरचना’)’ cess levied in this year’s Budget as a replacement for the additional duty of customs on petrol and diesel and additional(अतिरिक्त ) excise(उत्पाद) duty on these two fuels. Article 270 of the Constitution(संविधान/संघटन) allows the central government to levy and retain(बनाए रखने के/रोकना) any cess. The proceeds(परिणाम/लाभ) will not devolve(समर्पित) to the states, taking away a large amount of their fiscal(वित्तीय/राजस्व) resources. This goes against the spirit(भावना) of fiscal federalism(संघवाद) and the constitutional mandate(जनादेश/अधिकार-पत्र).

The Centre could well find this fiscally prudent(बुद्धिमान/विवेकी): it needs resources to compensate(मुआवजा देना/क्षतिपूर्ति करना) states for any revenue(आय/राजस्व) losses arising(उत्पन्न/उठना) from the transition to the goods and services tax (GST) that has subsumed(सम्मिलित) about 23 cesses. However, collections from special cesses on sin goods like cigarettes are supposed to take care of the compensation requirements(आवश्यकताओं). Besides, GST leaves audit trails on value addition across the production chain, and this would help track previously undisclosed(अप्रकाशित) incomes, besides more indirect taxes. Expansion of the direct tax base would enrich(समृद्ध/बढ़ाना) direct tax collections, leaving money for compensation. So, there is no justification(औचित्य /समर्थन) for the Centre to have converted shareable customs and excise duties on fuels with a cess that it keeps to itself. Dedicated(समर्पित) cesses are inferior(कम/न्यून) to general taxation. Yet, a road cess for building highways has been useful. But the goal should be to bring petrol and diesel under GST, with additional cesses that would not qualify for input credit. In the meantime(इस बीच,/इस समय में), why slash the states’ revenues?

 

 

Important Vocabulary

1.Devolution(हस्तांतरण/सौंपना)
Synonyms: deterioration, decadence, declension, decline, degeneration
Antonyms: ascent, improvement, increase, rise, achievement

2.Spirit(भावना)
Synonyms: deterioration, decadence, declension, decline, degeneration
Antonyms: apathy, cowardice, fear, idleness, inactivity

3.Retain(बनाए रखने के/रोकना)
Synonyms: absorb, cling to, contain, enjoy, have
Antonyms: abandon, desert, disperse, dispossess, exclude

4.Prudent(बुद्धिमान/विवेकी):
Synonyms: careful, cautious, discreet, economical, frugal,
Antonyms: careless, expensive, foolish, hasty, inattentive

5.Enrich(समृद्ध/बढ़ाना)
Synonyms: augment, cultivate, develop, endow, enhance
Antonyms: decrease, disgrace, worsen, deplete, impoverish

6.Inferior(कम/न्यून)
Synonyms: lesser, secondary, bottom, junior, less
Antonyms: superior, chief, important, major, necessary

7.Meantime(इस बीच,/इस समय में),
Synonyms: interim, interregnum, interruption, interval, meanwhile

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