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Know What Cess on Taxes is
August 07 , 2013

Apart from taxes we pay on our income, goods and services that we use we end up paying to the government in a number of other ways. Cess is one of them.

Meaning of cess

Cess, in the Indian context, commonly refers to tax applied on another tax and collected for meeting a specific cause. The most popular cesses are Education Cess and Secondary Higher Education Cess. These are applied on a number of taxes like Income Tax and Service Tax. It is used with a prefix that represents the purpose for which it is being levied. However cess can also simply mean tax. For instance, in the city of Navi Mumbai cess refers to Octroi.

Since cess is commonly expressed as a percentage of another tax, higher your tax money more cess you have to pay and vice versa.

Difference between cess, surcharge and taxes

Cess, as already mentioned, is collected by the government for an ear-marked purpose. Surcharge is applied on tax similar to cess but is not for a pre-determined use.

Debate on cess on taxes

There are debates in various circles about levy of cess being wrong and so on. What you can do as responsible citizen is to keep tab of whether money being collected as cess is being utilized efficiently or lying in government coffers or worse being diverted to other channels.

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