Indian Rupee currency notes
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In what could be a rude shock for taxpayers in the country, a massive amount of over Rs. 1.4 lakh crore collected by the government by imposing various cesses remains unutilised, according to a report by Comptroller and Auditor-General (CAG).

The government is still contemplating levying additional cesses despite keeping these huge funds idle. Recently, it has started levying Swachh Bharat cess of 0.5% on services like air travel and phone bills.

The government is proposing to levy 2% cess on air tickets that will be used toward "viability gap funding" of domestic airlines running flights to regional and remote areas. It also considering a hike for cess on sugar production.

The CAG report has found a huge fund of Rs 64,288 crore collected under the Secondary and Higher Education Cess (SHEC) during 2006-15 remaining idle, even as students protest against the scrapping of the non-National Eligibility Test fellowship, The Hindu reported.

"Neither a fund was designated to deposit the proceeds of SHEC thereto nor schemes identified on which the cess proceeds were to be spent. Thus, the possibility of the diversion of funds for purposes not mandated under the Finance Act cannot be ruled out," says the CAG report.

The government has imposed many cesses over the past years to fund educational programmes, worker welfare schemes, road development and research and development. But the money collected through cess should only be used for a specific purpose.

"As a normal process, the cesses are allowed for a specific purpose. For example, the education cess can only be used for education. Using the funds in other areas would amount to misuse," said Sachin Menon, chief operating officer-tax, KPMG.

"At a time when cash flow is a necessity, funds lying locked away in such a manner would have a huge detrimental impact on finances," he said.

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