Centre Diverted Funds for GST Compensation l What is a Cess ?
👉CAG's report on the accounts of the Union government were tabled in parliament on Wednesday, the last day of the Monsoon session.
👉CAG in its report has found that the government violated the GST compensation cess act of 2017 by retaining Rs 47,272 crore of GST compensation cess in the CFI during 2017-18 and 2018-19 and used the money for other purposes which led to overstatement of revenue receipts and understatement of fiscal deficit for the year.
👉"Audit examination of information in statements 8,9 and 19 with regard to collection cess fund and its transfer to the GST compensation cess fund shows that there was short crediting to the fund of the GST compensation cess collections totaling to Rs 47,272 crore during 2017-18 and 2018-19" the CAG has said.
👉"The temporary retention of GST cess in the Consolidated fund of India(CFI) in FY 18 and FY 19 is no diversion of the funds", a finance ministry official said in response to an observation made by the CAG.
Are there any other cess not transferred ?
👉Apart from the GST compensation cess, the CAG has also mentioned instances of non transfer of entire amounts of other cesses to their respective reserve funds including the Road and Infrastructure cess, Cess on Crude Oil, Universal service levy, and National mineral trust levy.
👉Audit observed that out of the rs 2,74,592 crore received from 35 cesses, levies and other charges in 2018-19, only Rs 1,64,322 crore had been transferred to reserve funds during the year and the rest was retained in the CFI
👉The report says," It is recommended that Ministry of Finance take immediate corrective action"
What is a Cess ?
Cess is a form of tax charged/levied over and above the base tax liability of a taxpayer. A cess is usually imposed additionally when the state or the central government looks to raise funds for specific purposes.
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