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24 February, 2021

5 Min Read

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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