Is Sport Cess a Need of time?

I am feeling the same as all Indian are feeling after getting 7 medals including First Gold medal in the history of athletics in Olympics happened in Tokyo, Japan Just few weeks ago still when every Indian like me See the medal table then one thought comes to our mind that why 135 Crore Population of India is getting only 7 Medals however America and Japan those population is very less than us is on 1st and 3rd position in Olympics Medal List.  China having more Population than us is on 2nd position in Medal tally. It’s a bitter truth when we Indian see Medal list we feel ashamed despite winning 7 Medals.

One day we were discussing this issue with our friends and one thought came in one of our friend’s mind that how we can boost our sport infrastructure through some basic changes in the policy. So I am writing this article in this regard to put up my points to boost sports infrastructure through Indian policy making Process.

Is Sport Cess a Need of time?

Why India is Not Well in Sports:-

Focus Only on Cricket: – In India Sport means Cricket and Cricket is religion here. Nobody wants to play other games also no infrastructure is there to play other games here in India. Just like BCCI is handling Cricket for all games a body should be appointed to run other sporting events in efficient manner with funding and sponsorships.

Lack of infrastructure– When we talk about Infrastructure of Sport in India, there is no such infrastructure as of now except Cricket. No Training equipment, not recognised coaches, no or less sports awareness as far as other sports is concern.

Not supporting talent in their early stages– China  ,US and Japan nurtures their talent in early age say 8–10 ,but here in India , parents are busy in loving and caring their child at that age and every Parent Wants to make their Child a Professional or a Government Servant .

Before going further we should first understand what the meaning of Cess is in Indian context:-

A cess is a form of tax levied by the government on tax with specific purposes till the time the government gets enough money for that purpose. Different from the usual taxes and duties like excise and personal income tax, a cess is imposed as an additional tax besides the existing tax (tax on tax).

How does it impact taxpayers?

Though cess is different from normal taxes from Government’s perspective, it is as good as any tax for common man as it is only going to increase his outflow. While increased cess on direct taxes increases the tax outflow, cess on indirect taxes may increase the cost of various products in most cases and thereby increasing the cost of living. For eg: Infrastructure cess increased cost of motor vehicles as companies passed on the additional cess to customers by hiking car Prices.

As Per Indian Express News dated 24.06.2021, from 2010-11 to 2013-14, the Centre imposed 15 cesses and surcharges, which peaked to 25 in 2019-20. The introduction of GST has, however, subsumed many of these. During 2020-21 and 2021-22, nine are in operation. However, the levy on account of these nine cesses and surcharges is very high at Rs 3,72,971 crore during the years 2020-21 and 2021-22 as compared to average levy of Rs 1,10,180 crore during the years 2010-11 to 2019-20. This is mainly because of an increase in effective rate of road and infrastructure cess as additional duty of excise on motor spirit and high speed diesel oil. In 2018-19, Rs 51,266 crore was collected from this cess, which increased to Rs 2,24,000 crore in 2020-21. This cess is collected for the particular purpose of development and maintenance of roads.

Two famous Cess imposed in India to boost Education and Health Infrastructure:-

1. Education Cess :-

Education Cess at 2% was introduced to meet Government’s commitment to provide and finance universalised quality basic education needs of poor people in India as an additional levy on basic tax liability.While this was helping students to complete primary education, Government realized the need for access to secondary and higher education as well and through Finance Act 2007 introduced an additional secondary and higher education cess of 1% to fund secondary and higher education cess. Overall education and secondary higher education cess of 3% was charged on all types of taxes.

2. Health and Education Cess vide Budget/Finance Act 2018 :-

In the Budget 2018, Finance Minister Arun Jaitley proposed various programmes to meet the education and health needs of Below Poverty Line (BPL) and rural families such as improving the quality of education, teachers, digital initiatives, quality education to tribal. In order to fund the education and health proposals announced in Budget 2018 as above, cess was increased by another 1%.

Accordingly, ‘Secondary and Higher Education cess’ was discontinued and ‘Health and Education Cess’ at 4% on tax (including surcharge) was introduced. Finance minister estimated an additional collection of Rs 11,000 crore with an increase of cess by 1%. Finance Budget 2018 was approved in both parliament houses and received President’s assent on 29 March 2018 and was enacted. Hence, Health and education cess will now be levied from financial year 2018-19.

Need of Sports Cess in Current Situation:-

The famous Hindu epic Mahabharata describes an incident where a game called Chaturanga was played between Pandavas and Kauravas. In some form or the other, the game continued till it evolved into chess. The question of the hour is how such a country with a rich sports culture scores so poorly now?

Recently, the Department related Parliamentary Standing Committee on HRD released its report on the Khelo India Scheme. Amongst others, it laid emphasis on the sports infrastructure projects in states. The Khelo India scheme was launched by the Ministry of Youth Affairs and Sports in the year 2016- 17 and it was revamped as Khelo India-National Programme for development of Sports which is being implemented from 2017-18 for a period of 3 years with a cumulative financial outlay for 3 years being Rs 1756 cr .
Like Other cesses as imposed by Government, Sports cess is also a hot topic now a day to boost Sport infrastructure in India at District Level to city Level to state Level and to Central Level. As it will reduce the burden of Government to provide funds to concerned sports universities, departments and other Sport related Organisations. As mentioned above by increasing 1 % Cess ,  Government has collected additional Rs. 11,000 crore hence it can be concluded that if government will add this cess with Income Tax and Other Taxes or with Liquor then it will be a good revenue collection and then it can be apportioned accordingly.

You will be happy by knowing that Uttarakhand government has put additional 0.5 percent cess on liquor to collect revenue to develop sports facilities and infrastructure in the state, said minister for sports and youth affairs.

Further, you cannot create a great sporting nation naturally for all sports. India naturally produces cricket stars and this is mostly because of public involvement. You see, when People here are dreaming of becoming the next Tendulkar or the next Kohli or Dhoni, a few of them end up becoming them. And then it creates a spiral: one generation inspires another, and so on. Same can happen in other sports too but we the people of India needs an inspiration always and that’s why If now we the people of India will dream to become Mirabai Chanu or Neeraj Chopra or Ravi Dahiya or Others who have won or participated then the one day will come when India fortunately will reach to at least in top 10 in Olympics Medal list.


Disclaimer: The contents of this article are for information purposes only and do not constitute an advice or a legal opinion and are personal views of the author. It is based upon relevant law and/or facts available at that point of time and prepared with due accuracy & reliability. Readers are requested to check and refer relevant provisions of statute, latest judicial pronouncements, circulars, clarifications etc before acting on the basis of the above write up.  The possibility of other views on the subject matter cannot be ruled out. By the use of the said information, you agree that Author / TaxGuru is not responsible or liable in any manner for the authenticity, accuracy, completeness, errors or any kind of omissions in this piece of information for any action taken thereof. This is not any kind of advertisement or solicitation of work by a professional.

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September 2021