EXCISE CONCESSION TO SSI

PROVISIONS OF GENERAL SSI EXEMPTION

SSI units eligible for SSI concession

Special provisions in respect of Textile Products

a) SSI unit can avail full exemption upto Rs. 150 lakhs and pay normal duty thereafter.

a) SSI unit can also pay full 100% duty and avail Cenvat credit.

CHOICES OF VARIOUS EXEMPTIONS

1. Simultaneous availment of Cenvat and SSI exemption permissible when SSI manufacturing with other’s brand name but not in other cases.

2. Cenvat to be reversed if unit decides to opt for exemption.

3. Cenvat on stock when unit decides to start availing Cenvat credit

• One manufacturer having more than one units

• One manufacturer for part of year and other for balance part of year in same factory

• More than one manufacturers in same factory

• Bogus or sham units

• No clubbing of units belonging to Govt, khadi and village commission etc.

First slab of Rs. 150 lakhs:There is full exemption from excise upto the first clearances of rs.150 lakhs, starting from 1st April every year, if the SSI unit does not avail cenvat credit on inputs.

Second slab after initial Rs.150 lakhs:After the turnover crosses Rs.150 lakhs, full normal duty is payable. The SSI unit can avail cenvat credit on inputs in respect of inputs used after turnover crosses Rs.150 lakhs.

Export turnover (except export to Bhutan/Nepal) to be excluded.

Goods cleared without the payment of duty.

Turnover of non-excisable goods should be excluded.

Goods manufactured with other’s brand name cleared on payment of duty should be excluded. (Except for goods manufactured in rural areas)

Job work amounting to manufacture.

ILLUSTRATION 1

Q1. S & Co., a small scale , had cleared goods of the value of Rs. 750 lakhs during the FY 2007-08. Records show that the following clearances were included in the total turnover of Rs. 750 lakhs:

1) Total exports during the year- 200 lakhs (30% of total exports were to Nepal)2) Job work under Notfn. No. 214/86= Rs. 50 lakhs. 3) Job work under Notfn. No. 83/94E = Rs. 50 lakhs4) Clearances of excisable goods without payment of duty to a 100% EOU- 20

lakhs.5) Goods manufactured in rural areas with other brand-100 lakhs.

6) Find out whether the unit is eligible to avail concession for the year 2008-09. Give Reasons???