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Home / Bare Acts / Central Acts and Rules / Miscellaneous Laws / Agricultural Produce Cess Act, 1940.

Agricultural Produce Cess Act, 1940.

1. Short title and extent.
2. Definitions.
3. Imposition of cess.
4. Power to exclude articles from Schedule.
5. Refund of, and exemption from, cess.
6. Payment of Cess to Council and expenditure of Cess by Council.
7. Standing Finance Committee.
8. Reserve fund.
9. Power of Central Government to make rules.
An Act to make better financial provision for the Indian Council of Agricultural Research

WHEREAS it is expedient to make better financial provision for the carrying out by the Indian Council of Agricultural Research of the objects for which it is established as set forth in the memorandum of Association of that body, and for this purpose to impose on certain articles a cess by way of customs duty on export, the proceeds of which shall be paid to the Council.

It is hereby enacted as follows.-


1. Short title and extent:- (1) This Act may be called the Agricultural produce Cess Act, 1940.

(2) It extents to the whole of India [except the state of Jammu and Kashmir.]

Object & Reasons6


2. Definitions:- In this Act, unless there is anything repugnant in the subject or context,– (8 of 1878) (19 of 1924)

[(a) “Commissioner” means a Commissioner of Customs as defined in clause (8) of section 2 of the Customs Act, 1962;]

(b) “Council” means the [Indian Council of Agricultural Research.] 3. Imposition of cess.-(1) A customs duty at the rate of one-half of one per valorem shall be levied on all article included in the Schedule which are exported from [the territories to which this act extends];

Provided that the said duty shall not be levied on articles proved to the satisfaction of the Collector not to have been produced in India.

(2) The Central Government may, by [notification] in the Official Gazette, fix for the purposes of levying the said duty tariff values of any articles included in the Schedule, and may alter any tariff values for the time being in force.

4. Power to exclude articles from Schedule:- he Central Government may after previous consultation with the council, by [notification] in the Official Gazette, direct that any article specified in the Schedule shall cease to the subject to the duty imposed by section 3, and thereupon, so long as the notification remains in force, that article shall deemed not to be included in the schedule.

5. Refund of, and exemption from, cess :- The Central Board of Revenue may make [rules] providing , on such conditions as may be specified, in the rules, for –

(a) the refund of duty levied where articles are exported by land and subsequently imported into India, and

(b) the export by land, without payment of the duty of the articles, which are subsequently be imported into India.
6. Payment of Cess to Council and expenditure of Cess by Council:- (1) The proceeds of the levied under this Act reduced by the cost of collection as determined by the Central Government shall be paid to the council.

(2) The amount so due shall be paid by the Central Government to the Council at the intervals of not more than six months.

(3) The expenditure of the money so paid to the council shall be subject to such limitation as may be imposed by rules made in this behalf by the Central Government.

7. Standing Finance Committee:- (1) The Council shall constitute a Standing Finance Committee, of which one member shall be chosen among the representatives of the Central Legislature on the governing body of the council, and one member shall be an officer appointed by the Central Government.

(2) Subject to the provisions of the sub-section (1) the constitution, functions and procedure of the Standing Finance Committee shall be regulated in such manner as the Council may with the previous approval of the Central Government determine.

8. Reserve fund:- The Council shall in accordance with the rules made in this behalf by the Central Government create and maintain a reserve fund.

9. Power of Central Government to make rules:-(1) Central Government may, after consultation with the council , by notification in the Official Gazette , make [rules] to carry out the purposes of the Act.

(2) In particular and without prejudice to the generality of the foregoing power , the Central Government may make rules regulating the expenditure of money paid to the council under section 6 and providing for the creation , maintenance and management of the reserve fund referred to in section 8.

[(3) All rules made under this act shall be laid before each House of Parliament while it is in session of a total period of thirty days which may be comprised in one session or in two successive sessions, and if, before the expiry of the session in which it is so laid or the successive sessions aforeside, both Houses agree in making any modification in the rule of the rule or both House agree that the rule should not be made, the rule shall thereafter have effect only in such modified form or be of no effect, as the case may be; so, however, that any such modification or annualment shall be without prejudice to the validity of anything previously done under that rule.]


(See section 3)
1. Bones

2. Bristle

3. Butter

4. Cereals, other than Rice and Wheat.

5. Drugs

6. Fibre for brushes.

7. Fish

8. Fruits

9. Ghee

10. Hides, raw.

11. Manures

12. Oilcakes

13. Pulses

14. Seeds

15. Skins, raw.

16. Spices

17. Tobacco, unmanufactured

18. Vegetables

19. Wheat

20. Wheat Flour

[21. Sheep’s or Lamb’s wool and animal hair, whether or not scoured or carded.]
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