Industry protests notwithstanding, the government, beginning 15 November, implemented the 0.5% Swachh Bharat cess on all taxable services to fund Prime Minister Narendra Modi’s pet cleanliness project.

It is the latest addition to the growing number of special levies, such as surcharges and additional or special duties, that have steadily accounted for an increasing share of tax collections in the last 20 years—from 7.5% in 1998-99 to a projected 18.6% in 2015-16.

THE COLLECTION

The government has been resorting to three kinds of special levies: cess (collected for a specific purpose), surcharge (without necessarily an earmarked end use) and other additional/special duties. Be it count, collections or contribution, the signifiance of this basket of levies is increasing.

THE BREAK-UP

In terms of purpose, the basket of special levies can be classified into five categories: cause-based (for example, road cess), education cess, corrective (surcharge on pan masala/tobacco products), miscellaneous (cess on exports) and additional/special duties. In the last decade, collections have shot up in the cause-based, miscellaneous and education categories.

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