Agri infra cess of ~2.5 on petrol and ~4 on diesel

The Centre on Monday imposed an agriculture infrastructure cess on a range of items, including petrol, diesel, gold, and alcoholic beverages, up to a 100 per cent, in a move that aims to further boost farm infrastructure.

“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, while proposing an Agriculture Infrastructure and Development Cess (AIDC) on a certain items.

According to the Budget documents, AIDC of ~2.5 per litre has been imposed on petrol and ~4 per litre on diesel. However, this cess, will not put additional burden on consumers, explained the minister. “To ensure the imposition of cess does not lead to additional burden in most of these items on the consumer, the basic Customs duty rates have been lowered. This cess shall be used to finance the improvement of agriculture infrastructure and other development expenditure," the minister said during her Budget speech.

Consequent to imposition of AIDC on petrol and diesel, the basic Excise duty and Special Additional Excise Duty rates have been reduced on them so that overall, the consumer does not bear any additional burden. Consequently, unbranded petrol and diesel will attract basic Excise duty of ~1.4 and ~1.8 per litre, respectively. These, apart from a 100 per cent cess, will also be imposed on other fermented beverages such as Cider, Perry, Mead, sake, mixture of fermented beverages and non-alcoholic beverages.