Agri infra cess of Rs 2.5 per litre imposed on petrol, Rs 4 on diesel

Agriculture Infrastructure and Development Cess (AIDC) of Rs 2.5 per litre on petrol and Rs 4 per litre on diesel will be imposed, Finance Minister Nirmala Sitharaman announced as part of her Budget 2021 speech. However, there will not be much change in price as basic excise duty and additional excise duty are being reduced. The AIDC will be also levied on other goods as well.

"Overall, there would be no additional burden on the consumer," the finance minister said. The Basic Excise Duty (BED) and Special Additional Excise Duty (SAED) rates have been reduced on petrol and diesel. Unbranded petrol and diesel will attract basic excise duty of Rs 1.4, and Rs 1.8 per litre, respectively. The SAED on unbranded petrol and diesel shall be Rs 11 and Rs 8 per litre, respectively. Similar changes have also been made for branded petrol and diesel.

The rise in petrol and diesel prices has been on hold for the last five days, but before that it had risen 10 times in January, with the two auto fuels increasing by Rs 2.59 and Rs 2.61 per litre.

Fuel prices have been increasing sharply in the country as well, but the retail hike varies from state to state due to the quantum of taxes levied on petroleum products in the state.

The high retail price in the country is despite the global crude price at $55 per barrel, significantly lower than $80 a barrel in October 2018 when petrol and diesel prices had first reached historic highs.

In the last week, the price of fuel has touched record highs in cities such as Bengaluru, Hyderabad, Chennai and Thiruvananthapuram.

The AIDC on import of 'gold and silver' will be 2.5%, alcoholic beverages (100%), crude palm oil (17.5%), apples (35%), 'coal, lignite and peat' (1.5%), fertilisers, including urea (5%), and cotton (5%).

“There is an immediate need to improve agricultural infrastructure so that we produce more, while also conserving and processing agricultural output efficiently,” the FM said in her Budget Speech in Lok Sabha.

"This will ensure enhanced remuneration for our farmers. To earmark resources for this purpose, I propose an Agriculture Infrastructure and Development Cess (AIDC) on a small number of items. However, while applying this cess, we have taken care not to put additional burden on consumers on most items," the minister added.

With inputs from agencies