Question

Q. Which of the following statements is/are correct about Agriculture Infrastructure and Development Cess (AIDC)?

Select the correct code from the options given below:

• A. 1 only
• B. 2 only
• C. Both 1 and 2
• D. None of the above
  

Answer 1

The correct option is A 1 only

Explanation:

• Statement 1 is correct. The purpose of the AIDC is to raise funds to finance spending on developing agriculture infrastructure.
• Statement 2 is incorrect. The AIDC has NOT led to an increase in the cost of products on which it is levied. Although AIDC has been levied, the corresponding reduction has been made in other taxes to adjust the prices. For example, The Union Budget has imposed an Agriculture Infrastructure and Development Cess (AIDC) of Rs 2.5 per litre on petrol and Rs 4 per litre on diesel. But thankfully, these will not result in any additional burden on consumers. The reason for it is that unbranded petrol was earlier attracting a basic excise duty (BED) of Rs 2.98 and a special additional excise duty (SAED) of Rs 12 per litre. These have now been reduced to Rs 1.4 and Rs 11 per litre, respectively. Similarly, the BED on unbranded diesel has been cut from Rs 4.83 to Rs 1.8 and the SAEC on it from Rs 9 to Rs 8 per litre. So, the overall excise incidence on petrol (BED+SAEC+AIDC) will now be Rs 14.9/litre, which was previously Rs 14.98, while that on diesel is Rs 13.8 (earlier Rs 13.83).