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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.
Eligiblity
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 174 of Central Excise Rule 1944) to get registered with the Central Excise Department before starting production.
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The SSI must file for registration when their turn over crosses Rs. 1 Crore only. The application for the registration should be submitted to the jurisdictional Range Superintendent of Central Excise.
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The Registration Certificate will be automatically granted. If it is not granted within 30 days of the receipt of the application it is deemed to have been granted.
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There is no fee for registration and a factory or a unit is to be registered once only. There is no need for renewal of the registration.
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The registration is applicable only for the premises where the manufacture is taking place.
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A separate registration is required for each premise.
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Case a new product is to be manufactured, the registration certification should be got endorsed for the additional items.
Exemption from registration
The requirement of registration has been exempted for the following persons.(Notification No. 22/98 CE(NT) dated 4.6.98 as amended)
Manufacturers who are only manufacturing goods, which are exempted from payment of duty of Central Excise.
For small scale industries who are manufacturing goods up to an aggregate value of less than Rs. 90 lacs. After crossing Rs. 90 lakhs turn over the SSI must file declaration.
In case an SSI is manufacturing goods of more than 30 lacs he must file a declaration only once. (the form is enclosed).
Who is covered by the SSI scheme
At present, in terms of notification nos. 8/2000-CE and 9/2000-CE, both dated 1st March, 2000, and effective from 1st April, 2000, 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.
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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.
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With effect from 1st April, 2000, the hitherto commodity specific exemption schemes for SSI units manufacturing cosmetics, refrigerating and air conditioning equipment, tread rubber and for articles of plastics have also been merged with the general small scale exemptions, as provided under the aforesaid notifications.
The salient features of these exemption schemes, as contained in the aforesaid notifications are as under:
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Where the SSI unit does not avail CENVAT
Notification No.8/2000-CE, dated 1st March, 2000 as amended. 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 up to a value of clearances of rupees one crore.
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Where the SSI unit avails CENVAT
Notification No.9/2000-CE, dated 1st March, 2000 as amended. The graded scheme of exemption in respect of those SSI units which intend to avail CENVAT is as under:
Sr. No. Value of Clearances Rate of Duty
- 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
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Subsequent Clearances at the normal rate of duty
The following clearances are excluded from computation of value of clearances
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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.
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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. However, the clearances of goods affixed with the brand name or trade name of another person - other than those which are in the nature of components or parts of machinery or equipment for use as original equipment in the manufacture of the said machinery, goods bearing the brand name of KVIC, NSIC or a State Small Industries Corporation or State KVIB or those goods manufactured in a factory located in a rural area are not eligible for the exemption/concession from excise duty irrespective of the value of clearances.
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Clearances which are fully exempt from excise duty under any other notification (other than those giving exemption based on quantity or value of clearances).
The conditions for availing the aforesaid exemption/concession from excise duty are as under
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The aggregate value of clearances of all excisable goods for home consumption by a manufacturer from one or more factories or from a factory by one or more manufacturers does not exceed rupees three hundred lacs in the preceding financial year.
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The manufacturer does not avail of the credit of duty under the CENVAT scheme upto an aggregate value of clearances of rupees one hundred lacs.
The thresholds of excise duty concessions under the aforesaid small-scale schemes act as a ladder for enabling the small units to grow and graduate into bigger units.
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) |
