**Executive Summary**
This document is a response to Lok Sabha Unstarred Question No. 2360, concerning the increase in cess and surcharge collections since 2014. It provides details of cess and surcharge collections, their utilisation, and their impact on state finances. It also addresses concerns about unspent balances and equitable fiscal distribution, with data provided for financial years 2014-15 to 2025-26. December 15, 2025 is the day the question was answered.
**Key Points / Main Content**
* **Cess and Surcharge Collections:**
* Year-wise details of major cesses and surcharges from FY 2014-15 to FY 2025-26 are provided in Annexure 'A', including their percentage share of Gross Tax Revenue (GTR).
* **Devolution to States:**
* Tax shares devolved to states are based on the recommendations of successive Finance Commissions.
* The state share of the divisible pool increased from 32% in FY 2014-15 to 41% in FY 2025-26.
* Year-wise details of devolutions to states since FY 2014-15 are in Annexure 'B'.
* **Utilisation of Cess and Surcharge Proceeds:**
* Proceeds are deposited in the Consolidated Fund of India, implying no unspent balances of cesses in the Fund.
* Details of collections and utilizations under major cesses since FY 2014-15 are in Annexure 'C'.
* **Fiscal Distribution:**
* Article 270(1) of the Constitution exempts cesses and surcharges from distribution between the Union and States.
* The Government of India has released 11 instalments of tax devolution in the current financial year, instead of 9, in the spirit of fiscal federalism.
* **Specific Cesses and Surcharges:**
* Data includes Agriculture Infrastructure & Development Cess, Cess on Crude Oil, Cesses on Exports, Health Cess, Health & Education Cess, National Calamity Contingent Duty, Road and Infrastructure Cess.
* Lists Goods & Services Tax Compensation Cess, Corporation Tax, Taxes on Income other than Corporation Tax, Fringe Benefit Tax, Social Welfare Surcharge under Customs
**Impact Analysis**
* **Central Government:**
* **Impact:** Required to provide detailed accounting and justification for the collection and utilisation of cesses and surcharges.
* **Action Required:** Maintain transparency in fiscal federalism and allocation of funds.
* **State Governments:**
* **Impact:** Affected by the decisions of the Finance Commission related to distribution of the divisible pool.
* **Action Required:** Monitor state finances and plan according to the devolution of tax revenue.
* **Taxpayers:**
* **Impact:** Affected by the cesses and surcharges levied on various goods and services.
* **Action Required:** Understand tax implications and comply with relevant regulations.
Key Entities Referenced
Constitution of India: Governs tax distribution between the Union and the States, specifically Articles 266 and 270(1).
Consolidated Fund of India: Where proceeds from cesses and surcharges are deposited according to Article 266 of the Constitution of India.
Ministry of Finance: The primary governmental body responsible for the subject matter, addressed by the Minister of Finance.
Finance Commissions: Successive Finance Commissions recommend the devolution of tax shares to the States.
Lok Sabha: Parliamentary body to which the question about cesses and surcharges was addressed.
Government of India
Ministry of Finance
Department of Revenue
LOK SABHA
UNSTARRED QUESTION NO. 2360
TO BE ANSWERED ON MONDAY, DECEMBER 15, 2025/AGRAHAYANA 24, 1947 (SAKA)
INCREASE IN CESS AND SURCHARGE COLLECTIONS
2360. MS SAYANI GHOSH:
Will the Minister of FINANCE be please to state:
(a) whether it is a fact that the collection from various cesses and surcharges have increased substantially
since 2014, if so, the details of total cess and surcharge collections and their percentage share in the total
tax pool, year-wise;
(b) whether it is true that cesses and surcharges being outside the divisible pool, have reduced the tax share
devolved to States, if so, whether the Government has assessed its fiscal impact on State finances and if so,
the details thereof;
(c) the total amount of cess and surcharge collected under each category but not spent along with the reasons
for such large unspent balance; and
(d) whether the Government proposes to release/share a portion of the unspent cess and surcharge funds
with the States or bring these levies back into the divisible pool to ensure equitable fiscal distribution and
if so, the details thereof?
ANSWER
MINISTER OF STATE IN THE MINISTRY OF FINANCE
(SHRI PANKAJ CHAUDHARY)
(a): Year-wise detail of Collections of major cesses and surcharges (in operation) during FY 2014-15
to FY 2025-26 and their share as a percentage of Gross Tax Revenue is enclosed as Annexure ‘A’.
(b): Tax shares are devolved to the States based on recommendation of successive Finance
Commissions. As a percentage of divisible Pool, the states share devolved to States increased from 32%
in 2014-15 to 41% in 2025-26.
Year-wise detail of devolutions made to the States since FY 2014-15 is enclosed as Annexure ‘B’.
(c): Proceeds from the cesses and surcharges are collected and deposited in Consolidated Fund of India
in terms of Articles 266 of the Constitution of India. The balances in the Consolidated Fund of India
close every Financial Year, this implies that there are no unspent balances of cesses in the Consolidated
Fund of India.
The details of the collections and utilizations under major cesses since FY 2014-15 is enclosed as
Annexure ‘C’.
(d): Taxes levied and distributed between the Union and the States are governed by Article 270(1) of
the Constitution of India. This Article exempts cesses and surcharges from distribution between the
Union and the States and hence do not form part of the divisible Pool. In the true spirit of fiscal
federalism, Government of India during this financial Year has till date released 2 additional instalments
of tax devolution (instead of 9 instalments Government of India has released 11 instalments till date).
*****Annexure A
Statement showing details of Cesses & Surcharges levied and collected as part of principal taxes
( ₹ crore )
RE BE
Sr No Name of the levy and tax receipt heads 2014-15 2015-16 2016-17 2017-18 2018-19 2019-20 2020-21 2021-22 2022-23 2023-24
2024-25 2025-26
CESSES IN OPERATION:
1 AGRICULTURE INFRASTRUCTURE & ... ... ... ... ... ... ... 76950.68 74142.03 80923.60 75180.00 80030.00
DEVELOPMENT CESS
2 CESS ON CRUDE OIL 14655.05 14310.69 12618.31 13579.21 17814.23 14062.49 10894.44 19353.84 21497.14 18803.41 17810.00 19330.00
3 CESSES ON EXPORTS 1179.06 122.39 177.21 384.56 1690.23 5759.14 9214.64 1457.10 852.44 -3.19 10.00 11.00
4 HEALTH CESS ... ... ... ... ... ... -13.52 31.02 24.01 22.90 30.00 35.00
5 HEALTH & EDUCATION CESS ... ... ... ... 41177.44 39131.10 35821.55 52732.33 61809.29 71156.96 85300.00 94000.00
6 NATIONAL CALAMITY CONTINGENT 3732.55 5172.93 6426.20 2938.44 1797.80 2380.44 5098.81 6138.30 7168.30 7812.25 9610.00 10380.00
DUTY
7 25121.95 69539.98 72399.53 83132.29 110847.16 122424.32 235782.55 195986.96 59234.95 44552.49 45250.00 47420.00
ROAD AND INFRASTRUCTURE CESS*
44688.61 89145.99 91621.25 100034.50 173326.86 183757.49 296798.47 352650.23 224728.16 223268.42 233190.00 251206.00
A Total (1 to 7)
% share of cess [ without GST Compensation Cess] 3.6% 6.1% 5.3% 5.2% 8.3% 9.1% 14.6% 13.0% 7.4% 6.4% 6.1% 5.9%
w.r.t GTR
B GOODS & SERVICES TAX ... ... ... 62611.59 95080.71 95553.09 85191.91 104768.66 125862.41 141436.16 153440.00 167110.00
C OMPENSATION CESS
C Total ( A+B) 44688.61 89145.99 91621.25 162646.09 268407.57 279310.58 381990.38 457418.89 350590.57 364704.58 386630.00 418316.00
% share of GST Compensation Cess
w.r.t GTR - - - 3.3% 4.6% 4.8% 4.2% 3.9% 4.1% 4.1% 4.0% 3.9%
SURCHARGES:
1 Corporation Tax 14302.20 17754.06 20109.73 21439.48 25448.59 19053.92 14078.57 15890.00 55103.79 60373.34 60000.00 70000.00
2 Taxes on Income other than Corporation Tax 1400.10 1565.16 2298.97 3211.77 4291.69 5236.92 5537.78 7922.88 53914.24 54793.80 76000.00 85000.00
3 Fringe Benefit Tax 0.04 0.03 0.01 ... 0.01 ... 0.37 ... ... ... ... ...
4 Social Welfare Surcharge under Customs ... ... ... 1221.88 8871.19 8796.12 13447.39 16945.06 16178.79 16273.41 17250.00 17500.00
D Total (1 to 4) 15702.34 19319.25 22408.71 25873.13 38611.48 33086.96 33064.11 40757.94 125196.82 131440.55 153250.00 172500.00
% share of surcharge w.r.t GTR 1.3% 1.3% 1.3% 1.3% 1.9% 1.6% 1.6% 1.5% 4.1% 3.8% 4.0% 4.0%
*Includes additional duty of excise on petrol and diesel, which were known as 'road cess' before introduction of 'road and infrastructure cess'.Annexure B
Year-wise details of devolu(cid:415)on of States' Share of Union Taxes and Du(cid:415)es since FY 2014-15.
Financial Year (₹ Lakh crore)
2014-15 3.38
2015-16 5.06
2016-17 6.08
2017-18 6.73
2018-19 7.61
2019-20 6.51
2020-21 5.95
2021-22 8.83
2022-23 9.48
2023-24 11.29
2024-25(RE) 12.87
2025-26(BE) 14.22Annexure C
Collections and Utilizations under major Cesses’
1. Prarambhik Shiksha Kosh (PSK), Madhyamik and Uchchatar Shiksha Kosh (MUSK) and Pradhan
Mantri Swasthya Suraksha Nidhi (PMSSN)
(₹crore)
Collection
(Health and (Transfer/ Utilisation) Balance
Year
Education Cess) (B) (A) – (B)
(A)
2014-15 36178.49 22323.19 13855.30
2015-16 28023.03 19298.16 8724.87
2016-17 30248.07 19732.47 10515.60
2017-18 31656.11 19139.80 12516.31
2018-19 41309.08 37836.88 3472.20
2019-20 39240.55 41308.40 -2067.85
2020-21 35894.82 70735.46 -34840.64
2021-22 52750.27 78286.97 -25536.70
2022-23 61813.92 70589.27 -8775.35
2023-24 71158.60 80009.96 -8851.36
2024-25 (RE) 85300.00 87198.73 -1898.73
2025-26 (BE) 94000.00 103000.00 -9000.00
Total 607572.94 649459.29 -41886.35
#Reserve Funds viz Madhyamik & Uchhatar Shiksha Kosh (MUSK) and Pradhan Mantri Swastya Surakashi Nidhi (PMSSN) have
been operationalized from FY 2022-23 after obtaining approval of C&AG in December, 2022. Amount transferred under MUSK
during the FY 2018-19 to FY 2021-22; and under PMSSN during the FY 2020-21 to FY 2021-22 are as per Revised Estimate (RE)
related to the respective year(s).
2. CENTRAL ROAD AND INFRASTRUCTURE FUND
(₹crore)
Collection*
(Road and (Transfer/ Utilisation) Balance
Year
Infrastructure Cess) (B) (A)-(B)
(A)
2014-15 25121.95 25777.94 -655.99
2015-16 69539.98 43175.10 26364.88
2016-17 72399.53 51853.58 20545.95
2017-18 83132.29 58521.63 24610.66
2018-19 110847.16 62879.64 47967.52
2019-20 122424.32 90252.40 32171.92
2020-21 235782.55 182363.47 53419.08
2021-22 195986.96 251738.18 -55751.22
2022-23 59234.95 239646.25 -180411.30
2023-24 44552.49 47777.66 -3225.17
2024-25 (RE) 45250.00 39777.90 5472.10
2025-26 (BE) 47420.00 41000.00 6420.00
Total 1111692.18 1134763.75 -23071.57
*Includes additional duty of excise on petrol and diesel, which were known as 'road cess' before introduction of 'road and
infrastructure cess'.3. NATIONAL DISASTER RESPONSE FUND
(₹crore)
Collection
[National Calamity (Transfer/ Utilisation) Balance
Year
Contingent Duty] (B) (A)-(B)
(A)
2014-15 3732.55 3460.88 271.67
2015-16 5172.93 5695.70 -522.77
2016-17 6426.20 6450.00 -23.80
2017-18 2938.44 3660.00 -721.56
2018-19 1797.80 2500.00 -702.20
2019-20 2380.44 2480.00 -99.56
2020-21 5098.81 5820.00 -721.19
2021-22 6138.30 6134.60 3.70
2022-23 7168.30 8000.49 -832.19
2023-24 7812.25 8801.21 -988.96
2024-25 (RE) 9610.00 9610.00 0.00
2025-26 (BE) 10380.00 10380.00 0.00
Total 68656.02 72992.88 -4336.86
4. AGRICULTURE INFRASTRUCTURE & DEVELOPMENT FUND
(₹crore)
Collection
(Agriculture and (Transfer/Utilisation) Balance
Year
Infrastructure Cess) (B) (A) - (B)
(A)
2021-22 76950.68 ... 76950.68
2022-23 74142.03 ... 74142.03
2023-24 80923.60 120714.39 -39790.79
2024-25 (RE) 75180.00 138822.37 -63642.37
2025-26 (BE) 80030.00 117676.85 -37646.85
Total 387226.31 377213.61 10012.70
* The Cess is being levied in pursuance of Finance Act, 2021.5. OIL INDUSTRY DEVELOPMENT FUND
(₹crore)
Collection*
(Transfer/ Utilisation) Balance
Year (Cess on Crude Oil#)
(B) (A)-(B)
(A)
2014-15 14677.24 ... 14677.24
2015-16 14468.94 ... 14468.94
2016-17 12778.20 ... 12778.20
2017-18 14246.20 ... 14246.20
2018-19 18556.09 ... 18556.09
2019-20 15800.92 ... 15800.92
2020-21 11474.15 ... 11474.15
2021-22 19324.29 ... 19324.29
2022-23 21629.22 ... 21629.22
2023-24 18803.41 ... 18803.41
2024-25 (RE)^ 17810.00 17730.00 80.00
2025-26 (BE)^ 19330.00 19376.03 -46.03
Total 198898.66 37106.03 161792.63
# The Cess is being levied under Oil Industry (Development) Act, 1974
^ The Reserve Fund in the Public Account of India has, however, been operationalized, going forward, from FY 2024-
25.
* Collection data till FY 2022-23 is taken from Annual report 2022-23 of Oil Industry Development Board.
6. GOODS & SERVICES TAX COMPENSATION FUND
(₹crore)
Collection
(GST Compensation (Transfer/ Utilisation) Balance
Year
Cess) (B) (A)-(B)
(A)
2014-15 ... ... ...
2015-16 ... ... ...
2016-17 ... ... ...
2017-18 62611.59 56146.00 6465.59
2018-19 95080.71 54275.00 40805.71
2019-20 95553.09 153910.29 -58357.20
2020-21 85191.91 106317.00 -21125.09
2021-22 104768.66 110795.47 -6026.81
2022-23 125862.41 163506.29 -37643.88
2023-24 141436.16 143109.49 -1673.33
2024-25 (RE) 153440.00 153440.00 ...
2025-26 (BE) 167110.00 167110.00 ...
Total 1031054.53 1108609.54 -77555.01