While introducing the 2021 Union budget, Indian Finance Minister Nirmala Sitharaman announced the Agricultural Infrastructure and Development Tax (AIDC) for some commodities and announced that AIDC will provide support to industries that have become bright spots in the COVID-19 pandemic.
Highlights:
♦ AIDC will be applied to a few projects. According to the specification, most products will not bring additional burden to consumers.
♦ AIDC was announced because of the urgent need to improve agricultural infrastructure to produce more products, and to effectively protect and process agricultural products. The tax system will also ensure an increase in farmers’ remuneration.
♦ The Minister of Finance proposes to propose AIDC for various commodities as follows: The price of gasoline is 2.5 rupees per litre. Rs 4 per litre of diesel. 5% of gold bars, silver bars and copper bars. 100% of alcoholic beverages. 5% of crude palm oil. 20% of crude soybean and sunflower oil. 35% of apples. Coal, lignite and peat account for 5%. Specify 5% of fertilizer. 30% of Kabuli chana. Lentils (Mosur) accounted for 20%. Bengal grams/chickpeas are 50%. Peas account for 40%. Uncarded cotton accounts for 5%.
♦ The consumption tax on gasoline and diesel will not impose any additional burden on consumers, because non-branded gasoline has previously attracted a basic consumption tax (BED) of Rs 2.98 and a special additional consumption tax (SAED) of Rs 12 per litre.
♦ Now, BED and SAED have dropped to 1.4 rupees and 11 rupees per litre respectively. Therefore, net consumers will not pay any additional fees. Similarly, the charge for alcoholic beverages is 150% of the BED, which has now reduced to 50%. The proposed AIDC is 100%, which will not impose any additional burden on consumers.
