Tax and fee, it is true that between a tax and a fee there is no generic difference. Both are compulsory exactions of money by public authorities; but whereas a tax is imposed for public purposes and is not, and need not, be supported by any considera-tion of service rendered in return, a fee is levied essentially for services rendered and as such there is an element of quid pro quo between the person who pays the fee and the public authority which imposes it, Hingir Rampur Coal Co. Ltd. v. State of Orissa, AIR 1961 SC 459 (464): (1961) 2 SCR 537.
It is now well recognised that there is not generic difference between a tax in and a fee; both are compulsory exaction of money by public authority, Union of India v. R.C. Jain, AIR 1981 SC 951: (1981) 2 SCC 308: (1981) 2 SCR 854.
The chief purpose of a tax is to raise funds for the support of the Government or for a public purpose, while a fee may be charged for the privilege or benefit conferred, or service rendered or to meet the expenses connected therewith, Southern Pharmaceuticals & Chemicals v. State of Kerala, AIR 1981 SC 1863: (1981) 4 SCC 391: (1982) 1 SCR 519.