Finance Minister Nirmala Sitharaman has proposed a new cess of 100 per cent on imported alcoholic beverages. The Agriculture Infrastructure and Development Cess (AIDC) will also be levied on petrol, diesel, gold, silver and other items. Proceeds from this cess would be used for developing agricultural infrastructure, she informed.
"There is an immediate need to improve agricultural infrastructure so that we produce more, while also conserving and processing agricultural output efficiently. This will ensure enhanced remuneration for our farmers. To earmark resources for this purpose, I propose an Agriculture Infrastructure and Development Cess (AIDC) on a small number of items. However, while applying this cess, we have taken care not to put additional burden on consumers on most items," FM Sitharaman said during her Budget Speech on Monday.
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Subsequent to imposing the cess, the basic customs duty on imported alcoholic beverages has been reduced to 50 per cent "so that overall consumer does not bear additional burden on most of the items."
The Agriculture Infrastructure and Development Cess will be applicable from February 2, 2021. On customs side, apart from alcoholic beverages, the cess will be levied on gold, silver and dore bars (2.5 per cent); crude palm oil (17.5 per cent); crude soyabean and sunflower oil (20 per cent); apples (35 per cent); coal, lignite and peat (1.5 per cent); specified fertilisers (5 per cent); peas (40 per cent); kabuli chana (30 per cent); chick peas (50 per cent); lentils (20 per cent); and cotton (5 per cent).
On excise side, AIDC of Rs 2.5 per litre has been imposed on petrol and Rs 4 per litre on diesel. "Consequent to imposition of Agriculture Infrastructure and Development Cess (AIDC) on petrol and diesel, the Basic excise duty (BED) and Special Additional Excise Duty (SAED) rates have been reduced on them so that overall consumer does not bear any additional burden," a government statement said.
"Consequently, unbranded petrol and diesel will attract basic excise duty of Rs 1.4, and Rs 1.8 per litre, respectively. The SAED on unbranded petrol and diesel shall be Rs 11 and Rs 8 per litre respectively. Similar changes have also been made for branded petrol and diesel," it further added.