Centre hopes to mop up Rs 4.4 trillion from cess and surcharges in FY20

While an increase in cess and surcharges consequently denies states a higher share of taxes collected by the centre, such a revenue stream helps shore up the central government's coffers

The central government hopes to ramp up its collections from cess and surcharges to Rs 4.4 trillion in 2019-20, up from Rs 3.04 trillion last year. This amounts to 17.24 per cent of the centre’s gross tax collections in FY20 - a ten year high. To put this amount in perspective - consider that the centre’s entire capital expenditure for 2019-20 is pegged at Rs 3.36 trillion.  

Unlike all other taxes collected by the union government, revenues from surcharges and cess are not shared with states. Under the terms set by the 14th finance commission, states receive 42 per