News: The Ministry of Finance has removed the 11% import duty (5% Basic Customs Duty and 5% Agriculture Infrastructure & Development Cess) on cotton till September 30.
About Agriculture Infrastructure and Development Cess (AIDC)
- It is a tax imposed by the government on the commercial production of agricultural produce.
- Introduction: It was introduced in the Union Budget (2021-22), clause 115(1) of the Finance Bill 2021.
- This cess is imposed on goods specified in the first schedule to the Customs Tariff Act of 1975 when imported into India.
- Aim: The government aims to utilize the funds collected through AIDC for infrastructure development in agriculture across the country.
- Items covered: The items covered under AIDC are – gold, silver, alcohol beverages, crude palm oil, crude soyabean and sunflower oil, apples, coal, lignite and peat specified fertilizers, peas, kabuli chana, bengal gram, lentil and cotton.
- Purpose
- The revenue generated through AIDC will be utilized for infrastructure development in agriculture to enhance productivity and protect the sector from undue competition, ultimately increasing its output competently.
- The essential objectives to be completed include – creating state-of-the-art storage facilities, developing robust cold chains, improving transportation networks, implementing modern processing units, and enhancing farmers’ overall well-being.
- Impact on consumers: It offsets the reduction in customs or excise duty and thus does not raise the tax incidence for consumers.
Cess vs Tax
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