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Friday, February 26, 2021

Budget 2021: Petrol, diesel, 15 other commodities attract cess to fund agri infra development

This restructuring or readjustment of rates has been done to ensure that consumers do not end up paying more for most of these products, Sitharaman said.

Written by Prabha Raghavan | New Delhi |
February 2, 2021 2:08:15 am
An AIDC of Rs 2.50 per litre has been imposed on petrol and Rs 4.00 per litre on diesel.

In order to improve the nation’s agricultural infrastructure and increase remuneration for farmers, the government on Monday proposed a cess on 17 commodities, ranging from gold and silver to imported agricultural products.

“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,” said Finance Minister Nirmala Sitharaman during her Budget speech on Monday.

“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,” the Finance Minister added.

According to the minister, wherever the AIDC has been levied, the basic customs duty on that commodity has seen a reduction.

This restructuring or readjustment of rates has been done to ensure that consumers do not end up paying more for most of these products, she said.

An AIDC of Rs 2.50 per litre has been imposed on petrol and Rs 4.00 per litre on diesel. Consequent to the imposition of this cess, the basic excise duty (BED) and special additional excise duty (SAED) rates of these products have been reduced. According to the government, this means unbranded petrol and diesel will attract basic excise duty of Rs 1.40, and Rs 1.80 per litre respectively and an SAED of Rs 11.00 and Rs 8.00 per litre respectively. “Similar changes have also been made for branded petrol and diesel,” states a copy of the Finance Minister’s Budget speech.

Most products, except for those like non-carded or combed cotton, have seen a reduction in customs duty to accommodate the AIDC. The duty on cotton has been increased to 5.00 per cent from zero at present, and the commodity will also attract a 5.00 per cent AIDC.

Duties have been reduced to 7.50 per cent from 12.50 per cent on gold and silver, to 6.90 per cent from 11.85 per cent on gold dore bars and to 6.10 per cent from 11.00 per cent on silver dore bars. These products will attract AIDC at the rate of 2.50 per cent. The Social Welfare Surcharge (SWS) on AIDC is being exempted for gold and silver.

Duties on alcoholic beverages like beer made from malt, wines, whiskies, tequila, rum and fermented alcoholic drinks like mead sake have been revised to 50.00 per cent, and will attract AIDC of 100.00 per cent.

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