Centre Aims To Collect Rs 4.18 Lakh Crore From Cess, Rs 1.72 Lakh Crore From Surcharge In FY26

The Centre aims to collect cess of over Rs 4.18 lakh crore in the current fiscal, an 8% growth over the collections as per Revised Estimates of Union Budget fiscal 2025, Parliament was informed on Tuesday. Similarly, collections from surcharges are expected to increase about 13% to over Rs 1.72 lakh crore in the ongoing 2025-26 fiscal.

In a written reply to a question in the Rajya Sabha, Minister of State for Finance Pankaj Chaudhary said cess and surcharges are levied by the central government for the purposes of the Union under Article 271 of the Constitution. "The proceeds of such surcharge and cess go toward meeting certain specific needs such as financing of Centrally Sponsored Schemes. The benefits of such expenditure also percolate to states," he said. As per data shared with the House, the Centre has budgeted to collect over Rs 4.18 lakh crore from cess in fiscal 26, higher than about Rs 3.87 lakh crore as per RE of fiscal 2025.

Surcharge collection is budgeted to rise to over Rs 1.72 lakh crore in fiscal 2026, from Rs 1.53 lakh crore collection as per RE in fiscal 2025. Collection from surcharges and cess do not form part of the divisible pool and are hence not shared with states. Gross tax revenue collected by the Centre forms part of the divisible pool and distributed between the Centre and states.

Currently, eight different cesses are in operation. These are agriculture infrastructure & development cess; cess on crude oil; cess on exports; goods and services tax compensation cess; health cess; health and education cess; national calamity contingent duty; and road & infrastructure cess.

Surcharges are levied on corporate tax, income tax, and social welfare surcharge under Customs.