Govt May Introduce COVID-19 Cess In Budget 2021: Report

To make up for revenue losses due to COVID-19 and additional spending to curb the impact of the pandemic, the central government has discussed a coronavirus cess or surcharge ahead of the Union Budget presentation, said an Economic Times report citing sources.

The report said that the preliminary talks on revenue-raising measures have been held, however, the decision on whether a new levy in the form of a cess or surcharge will be imposed will be taken closer to the Budget Day, that is 1 February.

The said measures under talks include a small cess on taxpayers who fall under the high-income bracket and some indirect taxes, the report said. The central government could add a cess to excise on petroleum and diesel or on top of customs duties, it added.

Since the central government is likely to bear the costs of COVID-19 vaccination, which includes distribution, manpower training and logistics, a cess or surcharge will help the generate funds which unlike taxes, are not required to be shared with the state governments.

The coronavirus vaccine rollout is estimated to cost between Rs 60,000 and Rs 65,000 crore.

The nationwide COVID-19 inoculation drive will begin on 16 January and priority will be given to nearly three crore healthcare and frontline workers.