Finance Minister Nirmala Sitharaman stated on Thursday that the central government will share a portion of the collection from the proposed ‘Health Security se National Security Cess’ with states. This approach is a departure from the standard fiscal arrangement, where cess collections typically remain outside the divisible pool of taxes. Sitharaman outlined that the revenue, intended as a general welfare measure, will be distributed to states to support their health schemes. Advertisement

The government introduced two bills to replace the compensation cess under the Goods and Services Tax (GST) regime. The GST compensation cess, implemented in 2017, aimed to incentivise states to join the GST structure by promising 14 per cent annual revenue growth for five years, funded through a cess

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