Agriculture Infrastructure Development Cess

The Budget 2021-22 has proposed a new levy, Agriculture Infrastructure Development Cess (AIDC) on 29 items.
The purpose of the new AIDC is to raise funds to finance spending on developing agriculture infrastructure.
The new cess will be levied on 29 products, such as gold, silver, as well as imported alcohol (excluding beer), imported apple, pulses, palm oil, urea, and petrol/diesel including branded ones.
The new cess will only offset the reduction in Basic Custom Duty (BCD), Basic Excise Duty (BED) and Special Additional Excise Duty (SAED) on unbranded and branded petrol-diesel.
Thus it will not raise the tax incidence for consumers.

Cess

Cess is a special-purpose tax levied over and above basic tax rates.
Drawing power from Articles 270 and 271 of the Constitution, the Centre collects cess and deposits it in the Consolidated Fund of India.
The money collected is then transferred to a segregated fund to be used for specific purpose.
But, this cess and surcharge money is not part of the divisible pool, from which devolution of Central taxes takes place to the States.

Source: TH

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