While presenting the Union budget 2021, Finance Minister Nirmala Sitharaman announced a new agriculture cess that will be levied on petrol, diesel and gold. The new cess, the government says, has been introduced to boost agriculture infrastructure in the country.

Nirmala Sitharaman said there is an immediate need to improve agricultural infrastructure so that we produce more, while also conserving and processing agricultural output efficiently.

“This (new cess) 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,” Nirmala Sitharaman announced.

Now, any new cess generally means consumers will have to pay more to purchase the same item or avail services. But the new agriculture cess announced today won’t be burdening the customers, the minister said.

“While applying this cess, we have taken care not to put additional burden on consumers on most items,” the minister said.

Lets’ explain this

Budget 2021 has proposed an Agriculture Infrastructure and Development Cess of Rs 2.5 per litre on petrol and Rs 4 per litre on diesel.

This would mean that people would have to pay Rs 2.5 more on every litre of petrol they buy and Rs 4 in case of diesel.

However, to ensure that this doesn’t happen, the finance minister said the government is reducing the Basic Excise Duty and Special Additional Excise Duty (SAED).

“Overall, there would be no additional burden on the consumer,” the minister said.

In a report news agency PTI said that consequently, 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, the report said.

Similar changes have also been made for branded petrol and diesel.

“The cess on import of ‘gold and silver’ will be 2.5 per cent, alcoholic beverages (100 per cent), crude palm oil (17.5 per cent), apples (35 per cent), ‘coal, lignite and peat’ (1.5 per cent), fertilizers, including urea (5 per cent), and cotton (5 per cent),” it added.