Agriculture Infrastructure and Development Cess (AIDC)
Part of: Prelims and GS – III – Economy
ContextIn a bid to curb the persistently high inflation in edible oils, the government has decided to exempt crude palm, soya-bean and sunflower seed oils from customs duty, and slash the Agriculture Infrastructure and Development Cess (AIDC) levied on their imports from October 14 till March 31, 2022.
Key takeaways
Imports of crude palm, soya-bean and sunflower seed oils attract a basic customs duty of 2.5% and an AIDC of 20%.
The customs duty has been dropped to zero, while the cess has been reduced to 5% for crude soya-bean and sunflower seed oil. In the case of crude palm oil, the AIDC cess has been reduced to 7.5% instead of the original 20%.
Benefits: The decision would help in reducing price burden on ultimate consumers amid the surging edible oil prices.
What is Agriculture Infrastructure and Development Cess (AIDC)?
Agriculture Infrastructure and Development Cess (AIDC) was proposed in the Budget 2021-22.
Purpose: To raise funds to finance spending on developing agriculture infrastructure aimed at not only boosting production but also in helping conserve and process farm output efficiently.
The new cess will be levied on 29 products, prominent among which are gold, silver, imported apple, imported alcohol (excluding beer), imported pulses, imported palm oil, imported urea, and petrol/diesel including branded ones.
It will only offset the reduction in customs or excise duty and thus will not raise the tax incidence for consumers.
Do you know?
Drawing power from Articles 270 and 271 of the Constitution, the Centre collects cess and deposits it in the Consolidated Fund of India.
However, the money is then supposed to be transferred to a segregated fund to be used for specific purposes.
