Tax refers to a financial charge levied by the government on people , firms or property. It is a major source of government revenue. On the contrary, cess is a kind of tax charged by the government to raise money for specific purpose like education, healthcare, child nutrition etc.
Difference Between Tax And Cess
The main dissimilarities or difference between tax and cess can be highlighted as follows:
1. Introduction
Tax: It is a financial charge imposed by a government to the firms and people on their wealth, income and products to generate revenue.
Cess: It is a type of tax collected by the government for specific purpose.
2. Scope
Tax: Its scope is wider than the scope of cess.
Cess: It has a limited scope than tax because it is only a type of tax.
3. Purpose
Tax: Tax is collected to generate government revenue.
Cess: It is collected for some certain purposes like child education, healthcare, agricultural development etc.
4. What Is It ?
Tax: It is a kind of fee.
Cess: It is a kind of tax
5. Types
Tax: Tax can be divided into two types i.e direct taxes and indirect taxes
Cess: Educational cess, healthcare cess, women empowerment cess, agricultural cess etc. are types of cess.
Tax Vs Cess (Comparison Chart)
Basis
|
Tax
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Cess
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Introduction
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Type of financial charge imposed by a government on wealth and income
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Kind of tax collected for specific purpose
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Scope
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Wider
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Limited
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Purpose/Objective
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Generating revenue
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Collecting fund for special purpose
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It Is
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Kind Of Fee
|
Kind of tax
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Examples
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Direct and indirect tax
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Educational cess, healthcare cess etc.
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Distinction Between Tax And Cess In Short
- Tax is a mandatory charge levied by the tax authority to generate government revenue. But cess is collected by the authority (generally by local government) to raise fund for specific purpose.
- Scope of tax is wider than cess because cess is only a kind of tax
