Automotive Cess is levied and collected in terms of Notification No. S.O. 932 (E), dated 28.12.1983 of Department of Heavy Industry issued under sub section (1) of Section 9 of the ID Act; and, further, as per the Auto Cess Rules, 1984. Cess on sale of automobiles is levied @ 1/8th of one percent ad valoram. For sake of administrative convenience, this Cess is collected along with excise duty collections but is maintained by Finance Ministry in a separate Head of Account.
Annually about Rs. 25 cr. From cess fund is allocated to DHI in the Non Plan Budget which is being used to fund pre-competitive R&D projects for the benefit of the industry through a transparent process of Cess committee which is chaired by Secretary. DHI. Since 1984, till 2013-14, about 200 projects have been funded from the auto cess, with a total project cost of about Rs 410 cr.
In 2014-15, an amount of Rs 24 cr. Has been allocated from Cess fund to Deptt. of Heavy industry, out of which an amount of Rs 19.24 cr. has been