In the Budget 2021 presented by Union Finance Minister Nirmala Sitharaman, a new ‘Agriculture Infrastructure and Development Cess’ (AIDC) has been brought in to provide for more funds that will go towards strengthening the agricultural infrastructure in the country by creation of cold storages, strengthening the supply chain etc.
The cess however is not uniform and varies for different products. It will be levied on items like petrol, diesel, crude palm oil, crude soyabean oil, alcohol, gold, silver, apples, peas, etc.
On alcoholic beverages, the cess will be levied at 100% as it is a luxury item. Gold and silver bars will attract 2.5%, however, the customs duty on both the metals has been brought down by 5% thus not affecting the end user.
Though the cess is being levied on fuels like petrol and diesel, the Central Government is bringing down the Basic Excise Duty and Special Additional Excise Duty commensurately. To make up for the cess, basic excise duty on petrol has been revised to ₹1.4 per litre from ₹2.98 per litre and on diesel from ₹4.83 per litre to ₹1.8 per litre.
So, there is no need for people to worry about a rise in fuel price rise because of the new AIDC.
The intention of the government is to levy this AIDC on items such that it would have not have a major impact on a huge section of the population
What the AIDC does is to levy a tax on items are primarily used extensively by affluent sections and redistribute that money to those in need especially those dependent on agriculture.
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