Fact Check: Will The Price of Fuels Increase After Agriculture Cess Imposed On Fuels?

NewsDesk    02-Feb-2021
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The Union Budget of 2021 has already been presented yesterday by the Finance Minister Smt Nirmala Sitharaman, which has already been seen to create certain doubts in the minds of middle class. This confusion in minds has been fuelled by the newly imposed Agriculture Infrastructure & Development Cess (AIDC) which has been brought in to facilitate an aid to the Agri Sector. The cess is not uniform throughout.


This cess is much applicable on Petrol and Diesel, which would have levitated the price of the fuel. But this AIDC is counter balanced by an equal reduction in the Basic Excise Duty (BED) and Special Additional Excise Duty (SAED).The Union Budget has imposed an AIDC of Rs. 2.5 per litre on petrol and Rs. 4 per litre on diesel.


Previously, unbranded petrol was attracting a BED of Rs 2.98 and SAED of Rs 12 per litre, but these figures have been reduced to Rs. 1.4 and Rs 11 per litre, respectively. Thereby the budget has cushioned the imposition of AIDC with a commensurate reduction in the BED and SAED, inorder to not burden the consumers. In case of unbranded diesel, BED has been cut from Rs 4.83 to Rs 1.8 per litre and SAED dropped down from Rs 9 to Rs 8 per litre.


This similar trend can be observed in the rates of Gold and Silver too, where 2.5% AIDC is levied but on contrary the custom duty has been reduced by 5%. There is 100% AIDC imposed on Alcoholic Beverages, probably with a consideration of it as a luxury.


The items on which this AIDC has been levied are not items which would create a huge impact on a large section of population. The AIDC is introduced in the Union Budget of 2021-22 only with a motive of facilitating as resources for improvement in agriculture infrastructure in the country.