Linking cess with govt borrowing

Subject – Economy

Context – The GST Council’s inaction on petro products and cess continuing till 2026 are likely to make life difficult for consumers

Concept –

Currently all taxes levied by both the Centre and States form two-thirds of the final price paid by the consumer.
The GST Council’s decision to retain compensation cess up to 2026 is also likely to disappoint consumers.
The Centre levies a fixed excise duty while States impose a VAT on petro products.
- VAT is advalorem tax.

To know about Cess and Surcharge, please click here.

To know about the history of cess in India, please click here.