15th Finance Commission to commission study on cess collections of Centre
The 15th Finance Commission will commission legal studies on
the cesses and surcharge levied by the central government but from which no
share is devolved to the states.
The Finance Commission recommends a ratio in which the tax
money collected by the central government is to be divided among the states every
It has begun work and will submit its report by October 2019.
In the pre-GST era, collections from direct taxes like
income tax and corporate tax and indirect taxes including excise duty and
service tax were divided between the centre and the state in a ratio
recommended by the Constitutionally-mandated Finance Commission.
Goods and Services Tax (GST) was rolled out from July 1 last
year subsuming excise duty and service tax along with other central and state
The 15th Finance Commission is headed by N K Singh will
suggest what will be states’ share in direct tax and GST collected by the
In both scenarios, cesses and surcharge levied by the Centre are not
included in the divisible pool.
The 15th Finance Commission will get "some legal studies" done on the entire cess and surcharges.
The previous 14th Finance Commission had raised the share of
states in centre’s tax revenue to a record 42 % for five year period starting
2015-16, up from previous 32 %.