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Govt levies 2% education cess

July 08, 2004 13:22 IST
Last Updated: July 08, 2004 15:24 IST

To give a boost to primary education in the country and in conformity with the Common Minimum Programme of the UPA, Finance Minister P Chidambaram on Thursday proposed to levy a cess of two per cent on income tax, corporation tax, excise and customs duties and service tax.

The new cess will yield about Rs 4,000-5,000 crore (Rs 40-50 billion) per annum and the entire amount will be earmarked for education including provision of nutritious cooked mid-day meal.

The education cess will be a 2 per cent surcharge on the total payable tax, and not 2 per cent of total income.

Chidambaram also proposed to launch a programme in central sector to upgrade 500 ITIs over the next five years at the rate of 100 institutes a year.

He said the schemes imparted by the ITIs must keep pace with the technological demands of industry and to produce world class technicians.

Under the programme, appropriate infrastructure and equipment will be provided, the syllabi will be upgraded and new trades will be introduced.

The minister called for the creation of a public-private partnership model for designing and implementing the scheme.

He said the selection of ITIs will be done in consultation with the state governments.

Chidambaram also announced that commercial banks have agreed to wave the collateral for educational loans up to Rs 7.5 lakh (Rs 750,000) if a satisfactory guarantee is provided on behalf of the student.

This is to ensure that no student admitted to any professional course in IITs and IIMs and medical colleges is deprived of the opportunity to study because of lack of funds.

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Number of User Comments: 11

Sub: education cess on central sales tax

1. I would like to know that is there any education cess on Central sales tax? 2. Will CST, against form C, be payable on ...

Posted by Ridhi Kapoor

Sub: Eduacation Cess

I would like to know whether education cess@2% is chargeable on cess duty charged @.125% (applicable to paper industries), whether excise is chargeable or not?


Sub: Has primary education improved?

2 years ago, the govt levied 2% education cess to fund the primary education and provide mid-day meals to needy students. However, we see that ...

Posted by Ambarish Mitra

Sub: New IT

HI, Collecting Education cess is ok ..but how do the tax payers know whether their money is used in the correct place..Any accounts where they ...

Posted by Deepak

Sub: Pay cess for your basic right.

Dear PC, Education is a basic right and you have proposed 2% cess, why don't you also propose 2% cess to let people enjoy their ...

Posted by young india


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