Center may introduce covid-19 Cess to help improve revenue ahead of budget 2021

Rutunjay Dole
·1-min read

To make up for the additional expenses incurred due to the coronavirus pandemic, the government is planning to impose a Covid-19 cess. The discussion regarding the same is underway and a final decision on whether the tax will be in the form of a cess or surcharge will be taken closer to the Budget announcement.

“Proposal for a cess has been discussed,” the Economic Times reported, citing sources. The preliminary talks revolved around a small cess on taxpayers who fall under the high-income bracket and some indirect taxes, the report said.

The Centre may also add a cess to excise on petroleum and diesel or on top of customs duties, it said. The Centre is likely to bear the cost of vaccination, although distribution, manpower training and logistics are being handled by the states. Covid-19 cess will allow the government to quickly generate funds as opposed to raising taxes. Additionally, the government will not have to share it with states as central cess collections belong to the Centre.

As per initial estimates, the coronavirus vaccine rollout may cost between Rs. 60,000 and Rs. 65,000 crore.

The government on January 9 said that it will launch the nationwide Covid-19 inoculation drive on January 16 and priority will be given to nearly three crore healthcare and frontline workers.

The decision, the government said, was taken at a high-level meeting where Prime Minister Narendra Modi reviewed the Covid-19 situation and vaccination drive preparedness across states and Union Territories.

India had recently granted emergency use authorization to two vaccines, Oxford’s Covishield being manufactured by Serum Institute in India and Bharat Biotech’s Covaxin. Both vaccines, the statement from the Health Ministry said, have established safety and immunogenicity.