October 01, 2018

Cess, Excess and the Profligate State

Shankkar Aiyar, Visiting Senior Fellow at IDFC Institute, writes in the New Indian Express on why cess and excess are a heady cocktail to prop up the profligate state. Excerpts:


"The tax department, it is often said, has what it takes to take what you have. This motto, once suggested for the US Internal Revenue Service, could well be used for governments. Taxation has probably generated more dark humour than any branch of finance, and the reasons seasonally dawn on taxpayers. The cynicism was best encapsulated by Ronald Reagan, who said, “The taxpayer is someone who works for the government but doesn’t have to take a civil examination.” 


This week, the wise men on the Goods and Services Tax Council met at its 30th meeting. The buzz was about rate cutting and inclusion of petroleum products under GST. The wise men discussed a new ‘cess’ — the National Disaster Relief Cess.  On Friday, the GST Council set up a seven-member committee led by Sushil Modi, deputy chief minister of Bihar, to examine the “modalities for revenue mobilization”.


Social media, which is a fertile ground for dark humour, buzzed about news of one more cess. On Saturday, Twitter was asked, ‘How about a cess for man-made disasters — for perpetual potholes, power sector losses and outages, for water woes, for loss-making PSUs, for IL&FS…’ Twitter universe suggestions included Air India Cess, LIC Cess, NPA cess, manual drainage cleaners’ cess and a Lower Parel Traffic cess. An angry Keralite suggested that the cess be called refuse donation to tax cess and one smart-alecky suggestion was for “success”!"


Read the full article here.

Topic : State Capacity / In : OP-EDS
Tags : cess , TAX , GST , surcharge
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