Distinction between a Tax and Fee - Indian Laws - General

Distinction between a Tax and Fee In the Shirur Mutt case- 1954 (4) TMI 29 - SUPREME COURT , the indicia of fee was stated in the following manner in para 45 of the reports : The distinction between a tax and a fee lies primarily in the fact that a tax is levied as a part of a common burden, while a fee is a payment for a special benefit or privilege. Fees confer a special capacity, although the special advantage, as for example in the case of registration fees for documents or marriage licences, is secondary to the primary motive of regulation in the public interest, vide Findlay Shirras on Science of Public Finance , Vol I, page 202. Public interest seems to be at the basis of all impositions, but in a fee it is some special benefit which the individual receives. As Seligman says, it is the special benefit accruing to the individual which is the reason for payment in the case of fees; in the case of a tax, the particular advantage if it exists at all is an incidental result of State action.