The Finance Minister in her Budget Speech proposed the Agriculture Infrastructure and Development Cess (AIDC) on certain items, including petrol, diesel, gold and some imported agricultural products with the objective to boost agriculture infrastructure.
Clause 115 of the Finance Bill, 2021 seeks to provide for levy and collection of Agriculture Infrastructure and Development Cess as duty of customs, on goods specified in the First Schedule to the Customs Tariff Act, being goods imported into India, at the rate not exceeding the rate of customs duty as specified in the said Schedule for the purposes of the Union for financing the agriculture infrastructure and other development expenditure.
Various markets of petrol, diesel, gold is facing issues relating to the calculation of ACID, the issue raised was whether AIDC is calculated on Import Value or Tax Value.
It is noteworthy that for the purpose of calculating the AIDC, the import value of such goods shall be calculated in the same manner as the value of goods is calculated under the provisions of section 14 of the Customs Act, 1962.
The Section 14 of the Customs Act, 1962 states that the value of the imported goods shall be the transaction value of goods, that is to say, the price actually paid or payable for the goods when sold for export to India for delivery at the time and place of importation.
The price at which the imported goods were sold after warehousing them in India does not qualify as the price actually paid or payable for the goods when sold for export to India for delivery at the time and place of importation and, hence, the value at which such transaction takes place will not qualify as the transaction value, as per Section 14.
For example, Mr. X then imported the agricultural products into India which was of Rs.20 Lakhs and incurred Rs. 5 Lakhs on its storage facility. The AIDC will be applicable on the import value i.e. Rs.20 Lakhs and not on price at which the imported goods were sold after warehousing.
Mr. X has to pay the AIDC on the import value of the goods and not the taxable value.
