Centre scraps import duty on crude edible oils

Subject – Economy

Context – Centre scraps import duty on crude edible oils, lowers agri cess

Concept –

The Centre cut the import duty on crude edible oils to zero and reduced the Agriculture Infrastructure and Development Cess (AIDC) on all oils — crude and refined — to contain surging cooking oil prices during the festival season and rein in inflation.
The Department of Revenue under the Ministry of Finance issued two notifications that will bring the duty cuts — ranging from 16.5 to 19.25 per cent —into force.
According to the notifications, import duty on crude palm oil (CPO), crude soyabean oil and crude sunflower oil has been reduced to zero from 2.5 per cent.

Agriculture Infrastructure and Development Cess (AIDC)

Cess is a kind of special-purpose tax which is levied over and above basic tax rates.
The purpose of the new AIDC is to raise funds to finance spending on developing agriculture infrastructure.
The new cess will 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.
The new cess will only offset the reduction in customs or excise duty and thus will not raise the tax incidence for consumers.
Drawing power from Articles 270 and 271 of the Constitution, the Centre collects cess and deposits it in the Consolidated Fund of India. However, the money is then supposed to be transferred to a segregated fund to be used for specific purpose.