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Circular No. 883/3/2009-CX
F.No.267/31/2008-CX-8
Government of India Ministry of Finance Department of Revenue (Central Board of Excise & Customs) Subject: Levy of cess on sugar manufactured out of cess paid raw material/ input- regarding
The Sugar Cess Act, 1982 provides that “There shall be levied and collected as a cess, for the purposes of the Sugar Development Fund Act, 1982, a duty of excise on all sugar produced by any sugar factory in India” for the development of sugar industry. References have been received from some field formations that some manufacturers purchase sugar, on which central excise duty and sugar cess is paid by sugar manufacturers. Such manufacturers use the duty paid sugar to manufacture products like Pharmaceutical grade sugar and Bura sugar. All the products, namely sugar, pharmaceutical sugar and Bura sugar fall under the same tariff classification. The manufacturers have represented that both the raw material and final product fall under the same tariff heading, and as cess has been paid on raw material viz., sugar, they are not required to pay sugar cess on products as it amounts to double taxation.
2. The matter has been examined in consultation with the Ministry of Public Distribution and Consumer Affairs. The Ministry of Public Distribution and Consumer Affairs has now exempted the levy of cess on sugar, collected as a duty of excise, under subsection (1) of the Section 3 of Sugar Cess Act, 1982, on any sugar “manufactured from such other sugar” on which cess, leviable under sub section (1) of Section 3 of the said Act has been paid already. The copy of the Notification S.O.102 (E) published in Gazette of India on
3. Trade and field formations may be suitably informed.
4. Hindi version will follow.
5. Receipt of this Circular may kindly be acknowledged.
Yours faithfully,
(Rahul Nangare)
Under Secretary to the Government of
Notification dated 07-01-2009
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