Explanation:

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) with a purpose of raising funds for a specific task.

• The Union government is empowered to raise revenue through a gamut of levies, including taxes (both direct and indirect), surcharges, fees and cess.
• A cess, generally paid by everyday public, is added to their basic tax liability paid as part of total tax paid.
• Article 270 of the Constitution allows cess to be excluded from the purview of the divisible pool of taxes that the Union government must share with the States. Article 250 mentions the power of Parliament to legislate with respect to any matter in the State List in case of emergency.

Cess should be kept as a separate fund after allocating to Consolidated Fund of India and can be spent only for a specific purpose.

• A cess is meant to raise revenue and is therefore temporary in nature.
• A particular cess continues to be levied till the time the government collects enough funds for the purpose that it was introduced for.

Hence only statement 1st is correct.