Union Budget 2021 | Will there be an additional Covid Cess or not?

There is a high possibility of an introduction of a Covid Cess because we all know that the government has almost hit rock bottom due to the pandemic. Millions have lost jobs and the government is almost in a state of recession due to the state of which the pandemic got us. It is getting very difficult even for the government to operate in such a tight budget and it is most likely that a Covid Cess will be introduced in the new budget which is to be introduced tomorrow.

Article 270 of The Constitution of India states that the Parliament can levy cess for a specific purpose under a law made by it. The Central cess collections will therefore not be shared or allotted to any states under revenue devolution. It is all given to the government and the government uses it as a part of its expenditures.

The final decision would be known tomorrow (1st February 2021) of whether or not a cess or surcharge will be introduced in the budget by the Finance and the Union Minister. Currently there is a cess of 4% which was introduced in the Union Budget 2018, by then Finance minister Arun Jaitley for health and education facilities. 

There is an estimated expenditure of around Rs. 60,000-65,000 on the vaccine rollout including the logistics. This is a huge new expenditure due to the pandemic which will require help from the public in the form of introduction of Covid Cess. Besides the government is also planning an additional spending on the infrastructure, the rural economy, MSMEs and Atmanirbhar Bharat Rozgar Yojana in the next financial year to support the economy. 

Many states also introduced an additional cess as the pandemic broke out to meet the expenses of the particular states. Punjab imposed more tax on liquor, Jharkhand introduced taxes on minerals, Delhi also introduced cess on liquor for a limited period of time(which was later withdrawn but VAT was raised)

According to the scenario an Introduction of covid cess is the need of the hour and the government must introduce a minimal amount of CESS for the public to pay additionally. The contribution of each and every taxpayer will count as the government is also in a very tough state and every contribution as an additional Cess could make a difference. 

Also explore our Certification Courses -

• Online Advanced GST Training and Certification Course by CA Bimal Jain -  Click here for details
• GST Practitioner Course Certified by MSME Govt of India - Click here for details
• 20 hrs Live GST Practical Training class on GST portal - Click here for details