AGRI CESS ON CRUDE PALM OIL

AGRI CESS ON CRUDE PALM OIL

TOPIC: Economy

Context- The central government has reduced agri-cess for crude palm oil (CPO) from 7.5% to 5% with effect from February 12.

Concept-

• This will provide relief to consumers and help in keeping a check on any further rise in the prices of domestic edible oils.

Agriculture Infrastructure and Development Cess (AIDC):

• Agriculture Infrastructure and Development Cess (AIDC) was proposed in the Budget 2021-22.
• To raise funds to finance spending on developing agriculture infrastructure aimed to boost production and farm output efficiency.
• The new cess to be levied on 29 products, prominent among which are gold, silver, imported apple, imported alcohol (excluding beer), imported pulses, imported palm oil, imported urea, and petrol/diesel including branded ones.

Cess:

• Cess is a special-purpose tax levied over and above basic tax rates.
• Drawing power from Articles 270 and 271 of the Constitution, the Centre collects cess and deposits it in the Consolidated Fund of India.
• The money collected is then transferred to a segregated fund to be used for specific purpose.
• But, this cess and surcharge money is not part of the divisible pool, from which devolution of Central taxes takes place to the States.