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         Exemption to small scale Ind. (SSI)
 

The contribution of Small Scale Sector in the industrial growth of the Indian economy and to the Gross Domestic Product is significant besides the potential for employment generation. The Small Scale Sector has for itself a special dispensation in the Central Excise law in order to make it competitive in the domestic and global market. Central Excise duty concessions have been extended to the units in the small-scale sector based on their turnover so as to facilitate them to graduate by availing these concessions in a graded manner.

ELIGIBILITY

Manufacturers of specified commodities having clearances not exceeding Rs. 3 crores in the preceding Financial Year are eligible for this exemption.

REGISTRATION OF SMALL SCALE COMPANIES

Every manufacturer of excisable goods is required (under Rule 9 of Central Excise Rules 2002) to get registered with the Central Excise Department before starting production. SSI units are exempted from registration till their value of clearances reaches the specified limits. (exemption limit – 10 lakh rupees)

WHO IS COVERED BY THE SSI SCHEME

At present, in terms of notification nos. 8/2003-CE and 9/2003-CE, both dated 1st March, 2003, and effective from 1st April, 2003, a general small scale excise duty exemption scheme has been made operational providing slab-rated concessions from excise duty in respect of clearances of specified excisable goods. Under these notifications, all goods specified in the First Schedule to the Central Excise Tariff Act, 1985 are eligible to avail the exemptions/concessions except for those goods which are chargeable to NIL rate of duty or which are exempt from whole of the duty and certain products as given in the Annexure to these notifications.

The salient features of these exemption schemes, as contained in the aforesaid notifications are as under:-

Where the SSI unit does not avail CENVAT

Notification No.8/2003-CE, dated 1st March, 2003. For first clearances effective from 1st April of a financial year up to an aggregate value of Rs. 1 Crore, duty is exempted in respect of those SSI units which do not intend to avail CENVAT Credit

Where the SSI Unit avails CENVAT

Notification No.9/2003-CE, dated 1st March, 2003. The graded scheme of exemption in respect of those SSI units which intend to avail CENVAT is as under:-

First clearances effective from 1st April of a financial year,up to an aggregate value of Rs.1 crore  - 60% of the normal rate of duty

Subsequent Clearances at the normal rate of duty

The following clearances are excluded from computation of value of clearances :

  • Clearances of the specified goods which are used as inputs for further manufacture of specified goods within the factory irrespective of the value of clearances.
  • Clearances of excisable goods affixed with the brand name or trade name of another person who is not eligible for availing the exemption under the aforesaid notification.

It may not be noted that wef 1.4.2003, the value of exempted goods will also be taken into consideration for computing the aggregate value.

Units availing SSI exemption are permitted to remove specified goods to a place outside the factory for getting any job work done on any specified goods without payment of duty (Notification number 83/94 and 84/94 Central Excise dated 11.4.94 as amended)

QUARTERLY RETURN OF PRODUCTION AND CLEARANCE (ER 1)

This return is to be filed once in a quarter, before the 20th day of the close of each quarter. A quarterly return of Cenvat Credit taken is also to be filed.

VISITS BY OFFICERS

No SSI factory should be visited by Central Excise Inspectors except with the specific permission of the Assistant Commissioner and for a specific purpose.

WHO TO APPROACH IN CASE OF PROBLEMS FACED

In case of any problems faced, the SSI is advised to approach either the jurisdictional Range Supdt., or the Asstt. Commissioner/ Deputy Commissioner of the Division or the Commissioner of Central Excise.

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