Levy of cess on automobiles consequent upon the introduction of new Central Excise Tariff, 1985 - Clarification regarding - Central Excise - 41/88

Levy of cess on automobiles consequent upon the introduction of new Central Excise Tariff, 1985 - Clarification regarding Circular No. 41/88 Dated 31-8-1988 [From F. No. 262/24/86-CX.8] Government of India Ministry of Finance (Department of Revenue) New Delhi Subject : Levy of cess on automobiles consequent upon the introduction of new Central Excise Tariff, 1985 - Clarification regarding. Doubts have been raised as to whether with the introduction of new Central Excise Tariff, 1985 w.e.f. 28-2-1986, cess is required to be levied once again on the body built motor vehicles even when cess has already been paid on chassis manufactured by the independent body builder. The matter has been referred to Administrative Ministry who have intimated that the intention behind the notification levying the cess is to realise such levy from the vehicle manufacturers and not from the body builders. Further, the provision of IDR Act, 1951, under which the notification levying the cess has been issued, provides that the rate of cess shall not in any case exceed two annas per cent of the value of the goods. If the cess is levied in line with the Excise Tariff Act, 1985, this would exceed the maximum rate of 1/8th per cent prescribed in the IDR Act. Therefore, the cess may continue to be levied and collected on the vehicles in the condition they are cleared from the premises of the manufacturers and no cess should be levied again in case the body on the chassis is built by an independent body builder on the cess paid chassis. The cess should be levied and collected accordingly. Trade interests should also be suitably informed.