Gau Raksha Cess | Burning Issues

Table of Contents

WHAT JUST HAPPENED?

To tackle the menace of stray cattle, the Yogi Adityanath-government in Uttar Pradesh has decided to set up ‘temporary’ shelter homes for cows across the State but the costs will be borne by the public in the form of additional ‘cow welfare cess’

THE DIFFERENCES BETWEEN TAX AND CESS

Depending on income earned during a financial year, income tax is levied on the taxable income. The rate of income tax for individuals ranges between 5% and 30%, depending on the amount of income. However, this is not the only tax liability you have to fulfil. You also need to pay a cess, calculated as a percentage of the amount of tax that you have to pay.
In the Union Budget 2018, finance minister Arun Jaitley had proposed to abolish the existing Education Cess and Secondary and higher Education Cess, charges at 3% of the amount of tax; and replace it with a new cess, to be charged at 4%.
All revenue received by the government by way of taxes—like income tax, central excise, customs and other receipts are credited into the Consolidated Fund, which has been constituted under Article 266 (1) of the Constitution of India. The funds so collected are then allocated to various purposes proposed in the Budget.
However, a cess is levied to develop only a particular service or sector, which is usually for social welfare, for instance: Swacch Bharat Cess and Krishi Kalyan Cess; which were levied on Service Tax, and have now been subsumed under Goods and Services Tax. As the names suggest in this case, these two cesses were for particular purposes.

TAX

The State government decided to introduce an additional levy of up to 0.5% as ‘gau kalyan cess’ charged on all things excisable and tolls collected on state highways, bridges and infrastructure-making, as also government-owned companies.

ABOUT THE TAX

Mandis, large wholesale markets licenced by the state that purchase most farm produce, will now pay 2% of income instead of the existing 1%, to protect cows.

WHY DO IT?

The government decision comes amid reports that farmers staged protests against the growing menace of stray cattle, which raid fields and destroy their crops. If cattle-rearers and farmers leave their animals in public places, on roads or on the private land of other people, a fine will be imposed on them, the government said. In parts of U.P., there has been a tradition to abandon old or dry cows.

TO SOLVE THE PROBLEM

No estimate has been offered on how much money the government hopes to make by collecting the cess, but sources in the government said it will help them tackle the problem of stray cattle across villages in UP.
For cow shelters, the government has also sanctioned Rs. 100 crore to local bodies.