Finance Minister of India


Shri P. Chidambaram
Finance Minister of India

2008.02.18


Text of letter written by Shri Rajul Awasthi, Officer on Special Duty to Finance Minister to the Editor in response to the article dated February 14, 2008 in The Times of India

Please refer to your report under the heading FM unlikely to levy a new cess – With Polls in sight, Budget may spare Taxpayers From More Burden in which your correspondent has observed:

Chidambaram, who has almost made it a habit to announce a cess or surcharge in every Budget.....

2. Please find enclosed a statement. You will find that the cess on diesel was first imposed by the NDA Government. Likewise, the surcharge on the basic customs duty, surcharge on corporate tax, surcharge on personal income tax, surcharge on excise duty on non-filtered/filtered cigarettes, additional duty of customs on tea/ tea waste and additional duty of excise on tea were imposed by the NDA Government.

3. The UPA Government imposed only an educational cess and increased the cess on petrol by 50 paise per litre (to fund roads). In fact, in 2007-08, the surcharge on corporate tax of 10 per cent on incomes less than Rs.1 crore was removed.

4. A fair report should have mentioned that most surcharges were imposed during the five years of the NDA Government and only education cess was imposed by the UPA Government.

Introduction of Cess and/or Surcharge in Union Budgets

Budget for
the Year

                    Cess

                                        Surcharge
NDA

1999-2000

 Cess on diesel Rs. 1 per litre

  1. 10% surcharge on basic customs duties on all commodities (except 4)

  2. 10% surcharge on corporate and personal income tax on all incomes

2000-2001

 --

  1. Increase in surcharge on personal income tax: to 12% on incomes between 60,000 to 1,50,000 and 17% on incomes above Rs. 1,50,000

  2. Increase in surcharge on corporate tax: to 13% on all incomes

2001-2002

 --

  1. 2% surcharge on personal and corporate income tax (removed earlier surcharge)

  2. Surcharge on excise duty on non-filter, filter cigarettes (various rates)

2002-2003

 Cess on diesel Rs. 1 per litre

  1. 5% surcharge on personal and corporate income tax (removed 2%)

2003-2004

 Increased cess on diesel by 50 paise per litre

  1. Increased surcharge on personal income tax to 10% on incomes above Rs. 8.5 lakh

  2. Reduced surcharge on corporate tax to 2.5%
  3. Surcharge of 1% on customs duty on specified goods
  4. Additional duty of customs on tea and tea waste @ Rs. 1 per kg. by way of surcharge
  5. Additional duty of excise of Re. 1 per kg. on tea by way of surcharge for development of tea plantation sector
UPA

2004-2005

 Education cess of 2% on all taxes

--

2005-2006

 Increased cess on petrol and diesel by 50 paise per litre

  1. Increased surcharge on corporate tax to 10%

  2. Surcharge of 10% on central excise on tobacco products to finance National Rural Health Mission

2006-2007

 --

--

2007-2008

 1% cess on all taxes for secondary and higher education

  1. Surcharge on corporate tax of 10% only on incomes over Rs. 1 crore