Agricultural Infrastructure and Development Cess
The Finance Minister of India, Nirmala Sitharaman, announced an agricultural infrastructure and development cess (AIDC) on some goods while presenting Union Budget 2021. AIDC was announced to provide support to those sector that has been one bright spot amid the COVID-19 pandemic.
- AIDC will be applied on a small number of items.
- Under the norms, no additional burden will be placed on consumers on most items.
- AIDC was announced because there was an immediate need to improve the agricultural infrastructure in order to produce more along with conserving and processing agricultural output efficiently.
- This cess would also ensure enhanced remuneration for the farmers.
AIDC on commodities
The finance minister proposed AIDC on various commodities as stated below:
- Rs 2.5 per litre on petrol.
- Rs 4 per litre on diesel.
- 5 percent on gold, silver and dore bars.
- 100 percent on alcoholic beverages.
- 5 percent on crude palm oil.
- 20 percent on crude soyabean and sunflower oil.
- 35 percent on apples.
- 5 percent on coal, lignite and peat.
- 5 percent on specified fertilisers.
- 30 percent on Kabuli chana.
- 20 percent on Lentil (Mosur).
- 50 percent on Bengal Gram/Chick Peas.
- 40 percent on peas.
- 5 percent on Cotton which are not Carded.
Impact on Consumers
Cess on petrol and diesel will not amount any additional burden on consumers because unbranded petrol was earlier attracting a basic excise duty (BED) of Rs 2.98 apart from a special additional excise duty (SAED) of Rs 12 per litre. The BED and SAED has now been reduced respectively to Rs 1.4 and Rs 11 per litre. Thus, the net consumer will not pay anything extra. Similarly, alcoholic beverages charges 150 per cent BED which now has been cut to 50 per cent. This in addition with the proposed AIDC of 100 per cent will not put any extra burden on consumers.
Category: Economy & Banking Current Affairs