More Stories

Informist, Monday, Jul. 20, 2026

 

NEW DELHI – The government's collections from cess and surcharges jumped nearly sixfold over the last 12 financial years, the finance ministry said Monday. The government collected INR 6.70 trillion as cess and surcharge in 2025-26 (Apr-Mar), 458% higher than the INR 1.20 trillion collection in FY15, the ministry said in a written response to the Lok Sabha. 

 

According to the Budget for FY27, the government is likely to collect INR 6.30 trillion as cess and surcharge this year, maintaining the broad trend of increased cess and surcharge as a percentage of gross tax collections. In FY15, collection from cess and surcharge was 9.6% of the total tax collections. In FY26, it totalled 16.4%, the ministry said. 

 

For FY27, the government has projected its total tax collections to grow 8% to INR 44.04 trillion. This means the government's cess and surcharge collection in FY27 will be 14.3% of the total tax pool. 

 

The increase in the share of cess and surcharge is significant as these are not shared with states as part of the divisible pool. Imposed for specific needs, the proceeds go towards meeting those specific requirements, such as financing of centrally sponsored schemes. 

 

There has been a rising discomfort among states, especially the Opposition-ruled states, that the current dispensation is pushing more taxes towards cess and surcharge, thereby shrinking the government's divisible pool. According to the 16th Finance Commission, the Centre has to transfer 41% of the tax collected to states as their share in the FY27-FY31 period.

 

Data, however, shows that the share of cess and surcharge in the total tax collected by the Centre has come down over FY21-FY26 period. In FY21, cess and surcharge made up 20.5% of the total tax collected by the Centre and in FY26, the share shrank to 16.4%. This downward trend is projected to continue in FY27 as well.  End

 

Reported by Priyasmita Dutta

Edited by Akul Nishant Akhoury

 

For users of real-time market data terminals, Informist news is available exclusively on the NSE Cogencis WorkStation.

 

Cogencis news is now Informist news. This follows the acquisition of Cogencis Information Services Ltd. by NSE Data & Analytics Ltd., a 100% subsidiary of the National Stock Exchange of India Ltd. As a part of the transaction, the news department of Cogencis has been sold to Informist Media Pvt. Ltd.

 

Informist Media Tel +91 (11) 4220-1000

Send comments to feedback@informistmedia.com

 

© Informist Media Pvt. Ltd. 2026. All rights reserved.