The Sugar Cess Act 1982 was enacted to provide for the imposition of a cess on sugar for the development of sugar industry and for matters connected therewith. The Act empowers the Central Government to levy the cess, by way of a duty of excise, on sugar which will help to generate funds for supplementing financial assistance for rehabilitation and modernisation or sugar factories and for development of sugarcane and research activities connected therewith. The Sugar Cess Rules, 1982 (which were made under the Act) provide for the manner of accounting reports and returns to be furnished by sugar factories, maintenance of accounts etc. An amount equivalent to the proceeds of the duty of excise levied and collected under the Act, reduced by the Cost of collection as determined by the Central Governments, shall be credited to the Sugar Development Fund formed under Section 3 of the Sugar Development Act, 1982.

From 1st November, 1982 the amount of cess payable by sugar factories is Rs. 14/- per quintal of sugar.