DEMAND FOR INCLUSION OF CESS AND SURCHARGE IN DIVISIBLE POOL UNDER G.S.T. TO BENEFIT STATES

FINANCE

12/12/19

SHRI AMAR PATNAIK (Odisha):Despite Union Government's vision under GST to promote 'One Nation, One Tax System', multiple cesses and
surcharges towards a variety of causes have been imposed. Although levied by the Central Government, these do not form part of divisible pool of Central taxes, thereby depriving States of their rightful share of resources.
The possibility of decline in the divisible pool of taxes for the upcoming fiscal years is further enhanced in the current climate of domestic economic slowdown which is likely to affect revenue collections. This brings greater urgency to the case for revising the usage of cesses and surcharges. Odisha's experience with the Clean Energy Cess or Coal Cess is a compelling example in this regard. This cess was increased to a rate of Rs. 400 per tonne collecting almost Rs. 87,000 crores by 2017-18. However, it was subsequently diverted to compensate GST losses. Only 18 per cent of total funds have been utilized for the clean energy projects by the National Clean Energy Fund (NCEF). Although Odisha contributed 21 per cent of coal production as of 2017, generating substantive revenues for the Central Government, it only received Rs. 2,264 crore that year (F.Y. 2017-18) as GST compensation. This demonstrates how Odisha's contributions to national revenue were not adequately reciprocated. I, therefore, demand that all cesses and surcharges be included within the divisible pool for the benefit of States. Additionally, I demand that Odisha be compensated from other cess and surcharge collections on account of its significant contributions to the now abolished Clean Energy Cess.