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Consider the following statements regarding cess and surcharges.
- The Constitution does permit the Centre to levy cess and surcharges beyond the basic taxes and duties in extraordinary situations.
- Cess and surcharges go to the divisible pool.
Which of the above statements is/are correct?
- a)1 only
- b)2 only
- c)Both 1 and 2
- d)Neither 1 nor 2
Correct answer is option 'A'. Can you explain this answer?
Most Upvoted Answer
Consider the following statements regarding cess and surcharges. The C...
The Constitution does permit the Centre to levy cess and surcharges beyond the basic taxes and duties in extraordinary situations. These additional taxes do not go to a divisible pool.
Divisible pool refers to the taxes of the central government that it should share with the sub-national or state governments in accordance with the recommendations of the Finance Commission.
Divisible pool refers to the taxes of the central government that it should share with the sub-national or state governments in accordance with the recommendations of the Finance Commission.
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Consider the following statements regarding cess and surcharges. The C...
Explanation:
Statement 1: The Constitution does permit the Centre to levy cess and surcharges beyond the basic taxes and duties in extraordinary situations.
According to the Constitution of India, the Centre has the power to levy taxes on various subjects. However, in exceptional circumstances, the Centre can also levy cess and surcharges beyond the basic taxes and duties. This is allowed under Article 271 of the Constitution, which empowers the Parliament to impose a cess or surcharge for specific purposes. These cesses and surcharges are usually levied to fund specific programs or projects, such as the Swachh Bharat Cess or the Krishi Kalyan Cess. Therefore, statement 1 is correct.
Statement 2: Cess and surcharges go to the divisible pool.
The divisible pool refers to the pool of resources that are shared between the Centre and the states. These resources mainly include the taxes collected by the Centre, such as income tax, excise duty, and customs duty. However, cess and surcharges are not a part of the divisible pool. They are not shared with the states and are entirely retained by the Centre for the specific purpose for which they were levied. Therefore, statement 2 is incorrect.
Conclusion:
In conclusion, statement 1 is correct as the Constitution does permit the Centre to levy cess and surcharges beyond the basic taxes and duties in extraordinary situations. However, statement 2 is incorrect as cess and surcharges do not go to the divisible pool. Hence, the correct answer is option 'A' (1 only).
Statement 1: The Constitution does permit the Centre to levy cess and surcharges beyond the basic taxes and duties in extraordinary situations.
According to the Constitution of India, the Centre has the power to levy taxes on various subjects. However, in exceptional circumstances, the Centre can also levy cess and surcharges beyond the basic taxes and duties. This is allowed under Article 271 of the Constitution, which empowers the Parliament to impose a cess or surcharge for specific purposes. These cesses and surcharges are usually levied to fund specific programs or projects, such as the Swachh Bharat Cess or the Krishi Kalyan Cess. Therefore, statement 1 is correct.
Statement 2: Cess and surcharges go to the divisible pool.
The divisible pool refers to the pool of resources that are shared between the Centre and the states. These resources mainly include the taxes collected by the Centre, such as income tax, excise duty, and customs duty. However, cess and surcharges are not a part of the divisible pool. They are not shared with the states and are entirely retained by the Centre for the specific purpose for which they were levied. Therefore, statement 2 is incorrect.
Conclusion:
In conclusion, statement 1 is correct as the Constitution does permit the Centre to levy cess and surcharges beyond the basic taxes and duties in extraordinary situations. However, statement 2 is incorrect as cess and surcharges do not go to the divisible pool. Hence, the correct answer is option 'A' (1 only).
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Consider the following statements regarding cess and surcharges. The Constitution does permit the Centre to levy cess and surcharges beyond the basic taxes and duties in extraordinary situations. Cess and surcharges go to the divisible pool.Which of the above statements is/are correct?a)1 onlyb)2 onlyc)Both 1 and 2d)Neither 1 nor 2Correct answer is option 'A'. Can you explain this answer?
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